The three major stock indexes on Wall Street rose on strength in tech shares despite a federal government shutdown. While some have raised concerns about a "bubble" surrounding the artificial intelligence (AI) industry, the view that there is still room to climb persisted, buoying investor sentiment.
On the 8th (local time) at the New York Stock Exchange, the Dow Jones Industrial Average finished at 46,601.78, down 1.20 points (0.00%) from the previous session. The Standard & Poor's (S&P) 500 index rose 39.13 points (0.58%) to 6,753.72, and the tech-heavy Nasdaq composite added 255.02 points (1.12%) to 23,043.38. Both the S&P 500 and the Nasdaq set record highs.
In particular, Nvidia Chief Executive Officer Jensen Huang's bullish case for the AI industry and his defense of Oracle led to buying in AI-related stocks. In an interview with CNBC, Huang said, "Over the past six months, computing demand has increased significantly," while also offering an optimistic outlook on the "Oracle margin shock" that chilled tech sentiment the previous day, saying, "As the system settles in, profitability will improve to a remarkable degree."
As a result, the Philadelphia Semiconductor Index, composed of AI and chip-related stocks, jumped 3.40%, with 28 of its 30 components advancing. AMD surged 11.37%, adding $120 billion in market capitalization this week alone. Nvidia and Broadcom gained more than 2%, while Micron Technology and Arm climbed around 5%. TSMC also rose more than 3%.
By sector, technology jumped 1.52%. Canada-based mineral exploration company Trilogy Metals fell 3% on the day after its shares surged 211% the previous day on news that the U.S. government would make an equity investment. U.S. satellite communications firm AST SpaceMobile jumped more than 8% on news of a partnership with Verizon.
Ross Mayfield, an investment strategist at Baird, noted, "We can all marvel at some of AI's capabilities, but ultimately you need demand for chips and demand for the software layer that is built on top of all computing," while adding, "It still seems like there is demand."