S&P 500 and Nasdaq end higher on Amazon-OpenAI deal; The Fed’s path forward is becoming murky

NEW YORK, Nov 3 – The S&P 500 and Nasdaq closed higher on Monday, with artificial intelligence-related deals taking much of the gains, while the Federal Reserve’s near-term monetary policy became increasingly foggy due to the scarcity of official U.S. economic data. Technology and tech-related companies helped propel the Nasdaq to its biggest gains, while healthcare companies UnitedHealth Group UNH.N and Merck MRK.N kept the Dow Jones in negative territory. One of the biggest positives was Amazon.com, after the company announced it had struck a $38 billion deal with OpenAI to enable the ChatGPT maker to run and scale its artificial intelligence workloads on Amazon Web Services cloud infrastructure. Nvidia shares rose after US President Donald Trump said the AI ​​chipmaker’s most advanced microchips will be reserved for US companies and kept out of China and other countries. Over the weekend, the White House released details of the deal reached by US President Donald Trump and Chinese President Xi Jinping to de-escalate the trade war between the world’s two largest economies. “The Amazon deal and other M&A news have given the market a boost, and you know, we entered the week after getting marginally positive news this weekend, both on the Chinese trade situation and some muted Fedspeak,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “(But) it is definitively a market led by big tech semiconductors, and has been that way for almost the entire bull market.”

Shares of Kimberly-Clark fell after it was announced that the consumer goods company will buy Tylenol maker Kenvue for more than $40 billion. While official economic data remains scarce amid the ongoing government shutdown, the Institute for Supply Management and S&P Global released their purchasing managers’ indexes, which showed that U.S. factories continue to grapple with uncertainty due to Trump’s tariff policies. The U.S. Supreme Court is expected to hear arguments Wednesday regarding the legality of Trump’s tariffs.

In the wake of last week’s expected rate cut, the Fed’s next move has become increasingly unclear given the lack of economic indicators due to the ongoing government shutdown. Payroll processor ADP’s National Employment Index, due Wednesday, could shed light on the state of the U.S. labor market. Fed officials expressed conflicting views, with Fed Governor Stephen Miran arguing for additional rate cuts, but Chicago Fed President Austan Goolsbee saying he was wary of additional cuts while inflation remains well above the central bank’s annual target of 2%.

According to preliminary data, the S&P 500 gained 12.52 points, or 0.18%, to end at 6,852.72, while the Nasdaq Composite gained 109.77 points, or 0.46%, to 23,834.72. The Dow Jones Industrial Average fell 218.88 points, or 0.46%, to 47,343.99.

The third quarter earnings season is in full swing and more than 300 companies from the S&P 500 have reported their figures. Of those, 83% have surpassed analyst estimates, according to the latest LSEG data.