{"id":59598,"date":"2025-10-07T19:29:10","date_gmt":"2025-10-07T19:29:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/59598\/"},"modified":"2025-10-07T19:29:10","modified_gmt":"2025-10-07T19:29:10","slug":"stocks-supported-by-the-ai-spending-boom","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/59598\/","title":{"rendered":"Stocks Supported by the AI Spending Boom"},"content":{"rendered":"

The\u00a0S&P 500 Index ($SPX<\/a>) (SPY<\/a>) today is up +0.16%,\u00a0the Dow Jones Industrials Index ($DOWI<\/a>)\u00a0(DIA<\/a>) is up +0.24%, and the\u00a0Nasdaq 100 Index ($IUXX<\/a>) (QQQ<\/a>) is up +0.25%.\u00a0 December E-mini S&P futures (ESZ25<\/a>) are up +0.13%, and December E-mini Nasdaq futures (NQZ25<\/a>) are up +0.22%.<\/p>\n

Stock indexes are slightly higher today, with the S&P 500 and Nasdaq 10 posting new all-time highs.\u00a0 Stocks are climbing today due to strength in chip makers and AI infrastructure stocks.\u00a0Advanced Micro Devices is up more than +6% today, adding to Monday\u2019s +23% surge to lead semiconductor stocks higher due to the spending boom in artificial intelligence. \u00a0<\/p>\n

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Optimism that growth in the AI sector and spending on artificial intelligence will translate into corporate profits is a major bullish factor for stocks.\u00a0 Stocks are also underpinned by hopes that a resilient US economy and additional Fed easing will continue to support the economy.\u00a0<\/p>\n

Hawkish comments Monday evening from Kansas City Fed President Jeff Schmid are negative for stocks when he said, \u201cWith inflation still too high, monetary policy should lean against demand growth to allow the space for supply to grow and relieve price pressures in the economy.\u201d<\/p>\n

The shutdown of the US government has now entered a second week, weighing on market sentiment and delaying key economic reports.\u00a0 The government shutdown means delays in the release of government reports, including today\u2019s international trade data for August and last Friday\u2019s monthly payroll report.\u00a0 A prolonged shutdown could also delay the government\u2019s inflation data, scheduled for release on October 15.\u00a0 The White House has warned that if the government shutdown lingered, it would trigger widespread dismissals of employees in government programs that don\u2019t align with President Trump\u2019s priorities. \u00a0Bloomberg Economics estimates that 640,000 federal workers will be furloughed during a shutdown, which would expand jobless claims and push the unemployment rate up to 4.7%.<\/p>\n

The ongoing US government shutdown, expectations of additional Fed easing, and political uncertainty in France and Japan are also driving investors to haven assets, such as gold and Bitcoin.\u00a0 Gold prices edged up to another record high today after Goldman Sachs raised its gold price forecast for 2026 to $4,900 an ounce from $4,300, citing ETF inflows and central bank buying.\u00a0 According to the latest data, the People\u2019s Bank of China added to its gold holdings in September for an eleventh consecutive month. \u00a0<\/p>\n

Market focus this week will be on any new developments regarding tariffs, trade, or attempts by lawmakers to end the ongoing US government shutdown. \u00a0On Wednesday, the minutes of the September 16-17 FOMC meeting will be released.\u00a0 On Thursday, Fed Chair Powell will give welcoming remarks at a Fed Community Bank Conference.\u00a0 On Friday, the University of Michigan Oct consumer sentiment index is expected to fall -1.1 to 54.0.<\/p>\n

Rising corporate earnings expectations are a bullish backdrop for stocks.\u00a0 According to Bloomberg Intelligence, more than 22% of companies in the S&P 500 provided guidance for their Q3 earnings results that are expected to beat analysts\u2019 expectations, the highest in a year.\u00a0 However, Q3 profits are expected to have risen by +7.2%, the smallest increase in two years.\u00a0 Also, Q3 sales growth is projected to slow to 5.9% from 6.4% in Q2.\u00a0<\/p>\n

The markets are pricing in a 93% chance of a -25 bp rate cut at the next FOMC meeting on Oct 28-29.\u00a0<\/p>\n

Overseas stock markets today are mixed.\u00a0 The Euro Stoxx 50 is up +0.16%. \u00a0China\u2019s Shanghai Composite did not trade and is closed for the week-long Lunar New Year holiday. \u00a0Japan\u2019s Nikkei Stock 225 rose to a new record high and closed up +0.01%.<\/p>\n

Interest Rates<\/p>\n

December 10-year T-notes (ZNZ5<\/a>) today are up by +1 tick.\u00a0 The 10-year T-note yield is down -0.6 bp to 4.146%.\u00a0 Dec T-notes recovered from a 1-week low today, and the 10-year T-note yield fell from a 1-week high of 4.175%.\u00a0 T-notes are supported by the ongoing US government shutdown, which could add to job losses and weaken the US economy, allowing the Fed to continue cutting interest rates.\u00a0<\/p>\n

T-notes initially moved lower today on hawkish comments from Kansas City Fed President Schmid, who said policymakers need to keep pressing against inflation, which has remained stubbornly high.\u00a0 Also, supply pressures are undercutting T-note prices as the Treasury will auction $119 billion of T-notes and T-bonds this week, beginning with today\u2019s $58 billion auction of 3-year T-notes.\u00a0 Losses in T-notes are limited as a protracted US government shutdown could weaken the economy, a supportive factor for T-notes.\u00a0<\/p>\n

European government bond yields are moving higher today. \u00a0The 10-year German bund yield is up +0.5 bp at 2.724%.\u00a0The 10-year UK gilt yield climbed to a 1-week high of 4.753% and is up +0.2 bp to 4.738%.<\/p>\n

German Aug factory orders unexpectedly fell -0.8% m\/m, weaker than expectations of +1.2% m\/m.<\/p>\n

Swaps are discounting a 1% chance for a -25 bp rate cut by the ECB at its next policy meeting on October 30.<\/p>\n

US Stock Movers<\/p>\n

Advanced Micro Devices (AMD<\/a>) is up more than +6%, adding to Monday\u2019s +23% surge, and leading gainers in the S&P 500 and Nasdaq 100 after Jeffries upgraded the stock to buy from hold with a price target of $300, citing the company\u2019s deal with OpenAI.\u00a0 Other chip makers and AI infrastructure stocks are climbing on the news, with Super Micro Computer (SMCI<\/a>) up more than +4% and Palantir Technologies (PLTR<\/a>) up more than +2%.\u00a0 Also, Intel (INTC<\/a>), Qualcomm (QCOM<\/a>), ARM Holdings Plc (ARM<\/a>), GlobalFoundries (GFS<\/a>), and Micron Technology (MU<\/a>) are up more than +1%.\u00a0 \u00a0<\/p>\n

Amkor Technology (AMKR<\/a>) is up more than +10% after the company broke ground on an outsourced semiconductor advanced packaging and test campus in Arizona.<\/p>\n

Dell Technologies (DELL<\/a>) is up more than +5% after projecting that annual adjusted EPS will increase 15% or more on booming AI demand.<\/p>\n

International Business Machines (IBM<\/a>)\u00a0is up more than +3% to lead gainers in the Dow Jones Industrials after it said it will integrate Anthropic\u2019s Claude family of large language models into its software portfolio.\u00a0<\/p>\n

Veeva Systems (VEEV<\/a>) is up more than +3% after TD Cowen upgraded the stock to buy from hold with a price target of $380.<\/p>\n

Intercontinental Exchange (ICE<\/a>) is up more than +1% after the Wall Street Journal reported that the company is in talks to invest $2 billion in Polymarket.\u00a0<\/p>\n

Constellation Brands (STZ<\/a>) is up more than +2% after reporting Q2 comparable net sales of $2.48 billion, better than the consensus of $2.45 billion.\u00a0<\/p>\n

Netflix (NFLX<\/a>)\u00a0is up more than +1% after Seaport Global Securities upgraded the stock to buy from neutral with a price target of $1,385.<\/p>\n

Aehr Test Systems (AEHR<\/a>) is down more than -26% after reporting that Q1 revenue decreased by -16% to $11 million from $13.1 million in the year-earlier quarter.\u00a0<\/p>\n

Ford Motor (F<\/a>) is down more than -5% to lead losers in the S&P 50 after the Wall Street Journal reported the company faces months of disruptions to its business after a major fire at an aluminum plant in New York.<\/p>\n

Homebuilder stocks are under pressure today after Evercore ISI downgraded the sector to in line from outperform. \u00a0DR Horton (DHI<\/a>), KB Home (KBH<\/a>), Lennar (LEN<\/a>), PulteGroup (PHM<\/a>), and Toll Brothers (TOL<\/a>) are down more than -2%. \u00a0<\/p>\n

Gitlab (GTLB<\/a>) closed down more than -3% after Mizuho Securities downgraded the stock to neutral from outperform.<\/p>\n

Dollar Tree (DLTR<\/a>) is down more than -2% after Jeffries downgraded the stock to underperform from hold with a price target of $70.\u00a0<\/p>\n

Autoliv (ALV<\/a>) is down more than -2% after UBS downgraded the stock to neutral from buy with a price target of $124.<\/p>\n

GE Healthcare Technologies (GEHC<\/a>) is down more than -1% after Citigroup Global Markets downgraded the stock to neutral from buy.<\/p>\n

CarMax (KMX<\/a>) is down more than -1% after Stephens downgraded the stock to equal weight from overweight.<\/p>\n

Earnings Reports(10\/7\/2025)<\/p>\n

McCormick & Co Inc\/MD (MKC), Penguin Solutions Inc (PENG), TuHURA Biosciences Inc (HURA).<\/p>\n

On the date of publication,<\/p>\n

Rich Asplund<\/a><\/p>\n

did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.<\/p>\n

For more information please view the Barchart Disclosure Policy<\/p>\n

here<\/a>.<\/p>\n

\u00a0<\/p>\n

More news from Barchart <\/p>\n

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.<\/p>\n","protected":false},"excerpt":{"rendered":"The\u00a0S&P 500 Index ($SPX) (SPY) today is up +0.16%,\u00a0the Dow Jones Industrials Index ($DOWI)\u00a0(DIA) is up +0.24%, and…\n","protected":false},"author":2,"featured_media":59599,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[345,343,344,85,46,125],"class_list":["post-59598","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-il","tag-israel","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/59598","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=59598"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/59598\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/59599"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=59598"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=59598"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=59598"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}