The major U.S. index futures indicate a higher opening on Monday, suggesting that stocks are poised for upward movement after the mixed performance observed in last Friday’s session. Technology stocks could potentially drive an initial upward movement, as indicated by the 0.9 percent increase observed in the Nasdaq 100 futures. Shares of Advanced Micro Devices are soaring by 35.7 percent in pre-market trading following the chipmaker’s announcement of a 6 gigawatt agreement to power OpenAI’s next-generation AI infrastructure across multiple generations of AMD Instinct GPUs. Under the terms of the agreement, AMD has granted OpenAI a warrant for as many as 160 million shares of AMD common stock, designed to vest upon the achievement of certain milestones.
Optimism regarding a surge in merger and acquisition activity may also stimulate initial buying interest following Fifth Third Bancorp’s agreement to acquire Comerica in an all-stock transaction valued at $10.9 billion. Comerica’s shares are experiencing a notable increase of 14.1 percent in pre-market trading, prompted by the announcement of the deal. Shareholders will receive 1.8663 Fifth Third shares for each Comerica share, equating to a value of $82.88 per share based on Fifth Third’s closing price on Friday. In the interim, market participants appear to be dismissing worries regarding the economic ramifications of the current government shutdown, which has now reached its sixth day with scant indications of advancement toward an agreement on a temporary spending bill. Following a predominantly upward trajectory in recent sessions, equities experienced additional gains in early trading on Friday; however, they relinquished some of those gains as the day progressed. The major averages retraced significantly from their session peaks before ultimately concluding with a mixed performance. In the latest market session, the tech-heavy Nasdaq experienced a decline of 63.54 points, representing a decrease of 0.3 percent, settling at 22,780.51. Conversely, the S&P 500 saw a modest increase of 0.44 points, which is less than a tenth of a percent, reaching 6,715.79. Meanwhile, the Dow posted a gain of 238.56 points, equivalent to a 0.5 percent rise, closing at 46,758.28.
In light of the day’s mixed performance, it is noteworthy that the major averages recorded substantial gains over the week. The Nasdaq experienced an increase of 1.3 percent, whereas both the Dow and the S&P 500 saw a rise of 1.1 percent. The Dow and the S&P 500 experienced an upward trajectory, marking their sixth consecutive session of gains and achieving new record closing highs. The continued advance by the Dow partly reflected strong gains by UnitedHealth, Travelers, and Caterpillar. Meanwhile, the pullback by the Nasdaq occurred alongside a decline in several prominent technology stocks, including Palantir, which experienced a drop of 7.5 percent. The decline experienced by Palantir followed a report, which referenced a recent internal U.S. Army memo indicating that the modernization of the army’s battlefield communications network, being pursued by Palantir and other entities, is fraught with “fundamental security” issues and vulnerabilities. Shares of Tesla also slumped by 1.4 percent, while shares of Nvidia slid by 0.7 percent after ending Thursday’s trading at a record closing high. The subdued performance of the broader markets can be attributed to the ongoing U.S. government shutdown, which has resulted in the indefinite postponement of crucial U.S. economic data, notably the highly scrutinized monthly jobs report. Nonetheless, disappointing figures from private sector sources have bolstered expectations that the Federal Reserve will persist in reducing interest rates in the upcoming months.
Following the release of a report indicated an unexpected decline in private sector employment, the Institute for Supply Management published a report this morning revealing a more significant than anticipated drop in its measure of service sector activity. The ISM reported that its services PMI declined to 50.0 in September, down from 52.0 in August, with a reading of 50.0 indicating the threshold between expansion and contraction. The index was anticipated by economists to decline slightly to 51.7. In light of the tepid conclusion observed in the broader markets, the majority of the key sectors concluded the day with only slight fluctuations. Healthcare stocks exhibited a significant upward movement, as evidenced by the Dow Jones Health Care Index rising by 1.1 percent, reaching its highest closing level in more than six months. Telecom, banking, and airline stocks exhibited notable strength during the day, whereas retail and semiconductor stocks experienced a decline.