Wall Street saw mixed results as AI powerhouses like Nvidia and Amazon surged, pushing the S&P 500 closer to its all-time high, even as most stocks declined and concerns about an AI bubble mounted. Manufacturing activity shrank, and tariffs created headwinds for some U.S. businesses.
On Monday, Wall Street experienced a mixed trading day, with the S&P 500 rising 0.2% and the Nasdaq climbing 0.5%, largely driven by significant gains in AI-related stocks. Nvidia led the charge, increasing 2.2% to bring its year-to-date gain to 54.1%. Amazon rallied 4% after a major $38 billion cloud computing deal with OpenAI. IREN, an AI cloud provider, jumped 11.5% following a $9.7 billion contract with Microsoft for Nvidia chips, and Palantir Technologies rose 3.3% ahead of its earnings report. Despite these gains, the Dow Jones Industrial Average dropped 0.5%, and the majority of S&P 500 stocks fell, fueling criticism that AI stocks might be inflating a dangerous bubble similar to the 2000 dot-com bust. However, four out of five S&P 500 companies have so far exceeded profit forecasts this reporting season, with overall index profits on track for nearly 11% growth. On the downside, Kimberly-Clark fell 14.6% after announcing its acquisition of Kenvue, which conversely gained 12.3%. Beyond Meat tumbled 16% due to a delayed earnings report and a pending non-cash charge, having recently been swept up in a 'meme stock' surge. Economically, a discouraging report indicated U.S. manufacturing activity shrank more than expected, with tariffs impacting several businesses. International markets were mixed, with South Korea's Kospi reaching a new record, boosted by SK Hynix's AI collaborations and a cancellation of port fees by China.
