Markets Surge on Rate Cut Hopes and Tech Stocks' OpenAI Boost
Markets reacted to a mix of economic indicators and corporate news on Wednesday. Investors awaited further rate cuts following weak jobs data, while tech stocks surged on OpenAI's valuation boost. The US government shutdown delayed key economic data releases.
Investors pinned high hopes on further rate cuts, with a 99 percent probability indicated by the FedWatch tool, after ADP's private sector jobs data disappointed on Wednesday. The Nasdaq 100 index initially soared above 24,900 points but closed up 0.12 percent at 24,830 points. Tech stocks led the rally, with Nvidia, Lam Research, and AMD gaining 1.5 percent, 1 percent, and 2.6 percent respectively. This upswing was fueled by reports of OpenAI's significant valuation increase.
Credit reporting agencies' shares fluctuated following Fair Isaac's announcement of a new sales model. Equifax and Transunion shares dropped between 7 and 11 percent, while Fico jumped nearly 24 percent. AMD's shares also climbed after reports of Intel's talks with AMD for its foundry business.
The US government shutdown led to delays in key economic data releases, including weekly job market data and industrial orders, pushing them to Friday. The broad S&P 500 index lost 0.09 percent to 6,705 points, and the Dow Jones Industrial index ended down 0.16 percent at 46,370 points.
Companies expressing strong involvement in the AI sector following OpenAI's valuation boost included Samsung and SK Hynix, which secured chip supply agreements, leading to notable stock price increases. Etsy and Shopify also benefited from cooperation with OpenAI, launching a new ChatGPT shopping feature, causing significant stock gains for both companies.
Wednesday's market movements reflected investors' hopes for rate cuts and tech stocks' strength, driven by OpenAI's valuation boost. The US government shutdown's impact on data releases and the Fed's upcoming monetary policy decisions will shape future market sentiment.
