Stock Market Update

[BRIEFING.COM] The Nasdaq Composite (+0.7%) eclipsed its record highs from last week as a result of strength in semiconductor and mega-cap names.

The S&P 500 (+0.4%) came within two points of its all-time high and notched a record closing high, while mixed sector strength saw the DJIA (-0.1%) move lower. 

Shares of Advanced Micro Devices (AMD 203.71, +39.04, +23.71%) climbed precipitously this morning after the company announced a deal with OpenAI involving a 6-gigawatt commitment to support OpenAI's next-generation AI infrastructure using multiple generations of AMD Instinct GPUs. As part of the agreement, OpenAI received a warrant for up to 160 million AMD shares, with vesting tied to deployment volume targets and AMD's stock performance. 

The PHLX Semiconductor Index moved higher in response, finishing with a 2.9% gain, though strength was not entirely ubiquitous throughout the industry. NVIDIA (NVDA 185.51, -2.11, -1.12%) moved lower in response, as AMD's partnership potentially threatens NVIDIA's dominant position in AI infrastructure. 

Despite the loss in its largest component, the information technology sector (+0.6%) mounted a solid advance today, supported by a nice gain in its second-largest component, Microsoft (MSFT 528.57, +11.22, +2.17%). 

Strength in mega-cap names also propelled the consumer discretionary (+1.0%) and communication services (+0.9%) sectors higher today. 

Tesla (TSLA 453.25, +23.42, +5.45%) was a notable standout, with shares rising after the company teased a product unveiling for tomorrow on social media. 

The Vanguard Mega Cap Growth ETF closed 0.9% higher, and the market-weighted S&P 500 (+0.4%) outperformed the S&P 500 Equal Weighted Index (-0.1%). 

Elsewhere, the utilities sector (+1.0%) expanded upon its hot start to the quarter, and the energy sector (+0.5%) advanced as crude oil futures settled today's session $0.84 higher (+1.4%) at $61.69 per barrel. OPEC+ announced an output hike of 137,000 barrels per day for November, which was in line with reports from last week. 

Only the real estate (-1.0%), consumer staples (-0.6%), health care (-0.5%), and financials (-0.1%) sectors closed with losses. 

While the market did not have any economic data to digest today, there was a decent amount of corporate news flow.

Fifth Third (FITB 43.79, -0.62, -1.40%) is set to acquire Comerica (CMA 80.19, +9.64, +13.66%) for $10.9 billion in an all-stock transaction that would result in the nation's ninth-largest bank with approximately $288 billion in assets.

Verizon (VZ 41.43, -2.24, -5.13%) weighed on the DJIA after announcing that former PayPal CEO Dan Schulman will become its new Chief Executive Officer, replacing Hans Vestberg.

OpenAI's developer event this afternoon saw several stocks move higher after receiving mentions, including Figma (FIG 57.00, +3.96, +7.47%), HubSpot (HUBS 463.53, +11.66, +2.58%), and Salesforce (CRM 245.78, +5.42, +2.25%). 

Just before the close, shares of AppLovin (APP 587.00, -95.76, -14.03%) fell sharply after Bloomberg reported that the SEC is probing the company's data-collection practices after a whistleblower complaint. 

Despite a lack of macro catalysts, today's action reflects the market's conviction in the AI trade even at record valuations, with mega-caps continuing to drive the index level push into record territory ahead of earnings season. 

U.S. Treasuries started the week on a lower note, adding to their losses from Friday. The 2-year note yield settled up three basis points to 3.60%, and the 10-year note yield settled up four basis points to 4.16%. 

• Nasdaq Composite: +18.8% YTD
• S&P 500: + 14.6% YTD
• Russell 2000: + 11.5% YTD
• DJIA: + 9.8% YTD
• S&P Mid Cap 400: + 5.5% YTD