Nasdaq 100 and S&P500: AI Momentum, Bank Mergers, and Fed Talks Lift Market

Nasdaq Gains on AMD Surge as Traders Watch M&A Buzz and Fed Speakers

The Nasdaq Composite outperformed Monday, rising 0.4% as AMD shares spiked on AI-related news, while the broaderS&P 500 added just 0.1%. The Dow lagged, falling 270 points, or 0.6%, as Home Depot and Verizon weighed on the index. A high-profile chipmaker partnership, regional bank consolidation, and Fed rate-cut expectations helped fuel sentiment even as a government shutdown stretched into its second week.

Is AMD’s OpenAI Deal a Game-Changer for Tech Stocks?

Advanced Micro Devices rallied over 23% after OpenAI reached a deal that may give the ChatGPT creator up to a 10% stake in AMD through multi-tranche warrants. AMD will supply GPUs in a multi-year rollout, putting competitive pressure on Nvidia, which traded lower premarket.

The surge helped push the tech sector 0.76% higher, with the broader Technology Select Sector hitting 5,704.55, led by bullish sentiment around AI infrastructure plays.

Can Bank Mergers Drive Further Regional Strength?

Comerica jumped 12% after agreeing to a $10.9 billion all-stock buyout by Fifth Third Bancorp. The deal would create the ninth-largest U.S. bank by assets. While Fifth Third slipped 4%, the SPDR S&P Regional Banking ETF gained as traders priced in the possibility of more M&A across mid-cap banks. Financials overall dipped 0.43%, but appetite for deal flow remains strong in the face of rising cost pressures.

How Is the Government Shutdown Affecting the Market?

Despite the funding impasse dragging into a second week, equity markets remain focused on earnings optimism and potential rate cuts. Delays in key data releases, including the September jobs report, haven’t rattled traders.

Fed officials are still on the schedule, with Governor Stephen Miran and Chair Jerome Powell expected to speak later this week. Bond markets and equities alike will be watching for policy clues amid the data blackout.

Is the Russell 2000 Leading a Small-Cap Breakout?

The Russell 2000 rose about 1%, topping 2,500 for the first time ever. The index has gained nearly 37% over the past six months and is up over 12% year to date. Its outperformance reflects investor interest in domestically focused, rate-sensitive stocks — a sign of growing confidence in a soft landing scenario.

Market Outlook

With the S&P 500 and Nasdaq each up four of the past five weeks, traders remain bullish into Q4. AI partnerships, regional bank consolidation, and rising small-cap momentum are keeping bid tone intact.

However, attention will shift to Fed speakers for signals on future policy moves. Any significant pullback from the ongoing shutdown may present a dip-buying opportunity, as market participants still expect upside toward year-end targets.

More Information in our Economic Calendar.