Nasdaq 100: Amazon spikes, Palantir jumps after-hours — tech stocks lift US indices today

Nasdaq Leads Gains as Amazon-OpenAI Deal Lifts AI Stocks; Fed Path Grows Unclear

The Nasdaq Composite closed higher on Monday, lifted by strong gains in artificial intelligence-related stocks, while the S&P 500 edged up and the Dow declined.

A $38 billion deal between Amazon and OpenAI fueled optimism in the tech sector, despite uncertainty surrounding Federal Reserve policy due to limited economic data during the government shutdown. Participation in the rally remained narrow, with gains concentrated in mega-cap tech and select consumer names.

Is AI the Catalyst Driving Monday’s Market Move?

Amazon jumped after announcing a partnership allowing OpenAI to scale its workloads on Amazon Web Services, further cementing AWS’s role in powering AI infrastructure.

Nvidia shares also advanced after former President Trump stated that the company’s top-tier AI chips would remain within U.S. borders, reinforcing expectations for domestic tech investment. These developments helped propel the Nasdaq to a 0.46% gain.

Despite gains in the tech-heavy index, market breadth was limited. Just a few sectors posted meaningful advances, with the rally driven largely by heavyweight names. The S&P 500 rose 0.18%, while the Dow Jones Industrial Average fell 0.46%, dragged lower by UnitedHealth and Merck.

Which Sectors Outperformed, and Which Lagged?

The consumer discretionary sector led with a 1.7% gain, helped by Amazon’s rally. Technology rose 0.39%, while utilities and healthcare were marginally higher.

However, industrials, financials, and materials all closed in the red. Kimberly-Clark slid after announcing a $40 billion acquisition of Tylenol-maker Kenvue, raising concerns about leverage and integration costs.

Overall, the gains were not broadly shared, suggesting continued investor preference for large-cap growth stocks over cyclical or defensive plays.

Is Fed Policy Getting Harder to Predict?

With official economic releases delayed by the government shutdown, the Fed’s next steps remain uncertain. While the central bank implemented a widely expected rate cut last week, Fed officials offered mixed guidance. Governor Stephen Miran advocated for further cuts, while Chicago Fed President Austan Goolsbee expressed caution, citing persistent inflation pressures.

Markets are now focused on Wednesday’s ADP employment report and potential commentary from the Supreme Court’s hearing on Trump-era tariffs, both of which could influence rate expectations and investor sentiment.

After Hours: Palantir Surges on AI-Fueled Earnings Beat

Palantir shares rose about 3% in extended trading after the company topped Q3 earnings expectations and raised its Q4 and full-year outlook. Revenue jumped 63% year over year to $1.18 billion, driven by strength in both commercial and government segments. The company now projects full-year sales of $4.4 billion, with free cash flow potentially exceeding $2 billion.

Palantir’s strong report underscores the growing role of AI in enterprise and government spending. However, analysts continue to flag its steep valuation, even as the company secures major contracts and expands its AI footprint.

More Information in our Economic Calendar.