Nasdaq, S&P holds onto gains as AMD jumps on deal with OpenAI

[NOUVEL YORK CITY, USA]

Wall Street's major averages were mixed on Monday, with the Nasdaq (COMP:IND) and the S&P 500 (SP500) advancing as Advanced Micro Devices' (AMD [https://seekingalpha.com/symbol/AMD]) stock jumped after inking a deal with OpenAI, while the U.S. government shutdown continued to grind on.

The Nasdaq Composite (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]) was last +0.4% in late morning trade, while the S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) was +0.2%. The Dow (DJI [https://seekingalpha.com/symbol/DJI]) opened in the green, but was last -0.4%.

Advanced Micro Devices (AMD [https://seekingalpha.com/symbol/AMD]) stock -- +28.1% -- jumped as the firm signed a pact with Microsoft (MSFT [https://seekingalpha.com/symbol/MSFT])-backed OpenAI to roll out AI infrastructure under a deal that is expected to deliver tens of billions of dollars in revenue for AMD.

Among the S&P’s top gainers, aside from AMD, are technology stocks Super Micro Computer (SMCI [https://seekingalpha.com/symbol/SMCI]), Palantir (PLTR [https://seekingalpha.com/symbol/PLTR]), Arista Networks (ANET [https://seekingalpha.com/symbol/ANET]), and Micron Technology (MU [https://seekingalpha.com/symbol/MU]).

“We believe investors made a mistake by selling software companies amid fears that they were going to be replaced by artificial intelligence, as we imagine a different future where the software companies with steady revenues and loyal clients expand their offerings with AI imbedded services, including data management, storage, cyber protection and enhance the value of their offerings to their clients,” said Robert Edwards, CIO at Edwards Asset Management.

“We can imagine that many of those software companies that are trading at historically low levels, and who’s top-line revenues continue to rise, could be the surprise winners for investors over the coming 12-18 months. Buying low is something we believe in for client portfolios seeking outsized returns,” Edwards added.

Also, as the U.S. government shutdown [https://seekingalpha.com/news/4500390-us-government-shutdown-officially-begins] continues on its sixth day, several economic reports have been put on hold. The key September jobs report, which was expected to land on Friday, has also been delayed.

According to prediction market Kalshi, the shutdown could last 21 days, which would tie it with the second-longest in U.S. history.

“Stocks tend to brush off government shutdowns as 'Beltway blah blah blah'. Government shutdowns used to last for days, but now they can last for weeks, so investors may need to be patient,” said Edwards.

“Even with the government shutdown and worries about the labor market, we believe the S&P 500 is on track to cross 7,000 by year-end,” he added.

Over in the bond market, the 10-year Treasury yield (US10Y [https://seekingalpha.com/symbol/US10Y#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]) rose 3 basis points to 4.15%, while the 2-year yield (US2Y [https://seekingalpha.com/symbol/US2Y#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]) rose 2 basis points to 3.59%.

Wall Street’s broader market averages closed mixed on Friday as market participants digested the U.S. government shutdown for the third day.

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