Nasdaq Index: Microsoft-OpenAI Deal Fuels AI Bid in US Indices Today

Nasdaq Rises Midday as Microsoft-OpenAI News Sparks AI-Fueled Bid

The Nasdaq Composite is trading higher midday Tuesday, up 0.5% as traders lean into AI optimism following Microsoft’s stake in OpenAI.

While megacap tech stocks drive the action, overall breadth remains mixed, with gains concentrated in a handful of names.

Real estate and utilities are lagging, and the broader S&P 500 is nearly flat, suggesting the market is still waiting on stronger conviction ahead of key earnings and Wednesday’s Fed decision.

Is AI doing all the heavy lifting again?

Pretty much. Microsoft is up over 2% after announcing a 27% stake in OpenAI as the firm restructures into a public benefit corporation. That headline alone gave the Nasdaq a lift, but traders are also rotating back into broader AI plays — Nvidia, up 1.2%, and CrowdStrike, up nearly 3%, are clear beneficiaries. PayPal is also ripping, up 9%, after unveiling a partnership with OpenAI to enable ChatGPT-based purchases.

Apple tagged a $4 trillion market cap earlier before paring gains. Traders are still watching how its iPhone momentum stacks up against the rest of the AI arms race — and results later this week could provide some answers.

What sectors are working — and what’s not?

Tech leads, as usual, with the sector up nearly 0.8% at midday. Consumer discretionary is next best, up 0.7%, thanks to a 3% pop in Tesla and a monster 22% rally in Wayfair on a big earnings beat. Industrials are mostly flat despite a strong 8% jump in UPS after Q3 revenue topped forecasts.

On the flip side, real estate is the clear laggard — down 2% — after Alexandria Real Estate slashed guidance and missed the mark. Utilities and energy are also under pressure, both off more than 0.5%, likely tied to rate and demand concerns.

Which names are making noise on earnings and news?

PayPal’s 9% move is grabbing headlines, helped by solid earnings and that ChatGPT shopping angle. Regeneron is up 8.6% after positive trial updates, while Intel and Fortinet are climbing on broader tech sentiment.

On the downside, Synopsys and Qualcomm are both trading lower — 4% and 3% respectively — despite no fresh catalysts. Likely profit-taking as traders clean up ahead of key earnings.

What’s the market watching into the close?

All eyes are on tomorrow’s Fed decision. Traders are leaning toward a pause, and futures now price in 50bps of cuts by year-end. But with the government shutdown delaying key economic data, earnings and Fed tone are carrying more weight than usual.

If Powell sounds dovish — or just not too hawkish — the rally could keep grinding. But tech’s doing most of the work here. Broader participation is still lacking, and sellers haven’t gone away — they’re just sitting back for now.

Bottom line: Tech’s carrying the torch again, but it’s still a narrow trade. The next real move may come after the Fed speaks — and the earnings floodgates open later this week.

More Information in our Economic Calendar.