Most U.S. stocks advanced on Tuesday, bringing the market back to levels seen before last week’s decline. The S&P 500 rose by 0.2% after recovering from earlier losses in the day. The Dow Jones Industrial Average gained 559 points, or 1.2%, reaching a new record high and surpassing its previous peak from two weeks ago. Meanwhile, the Nasdaq composite fell by 0.3%, weighed down by continued declines in Nvidia shares amid concerns over high valuations for artificial intelligence-related stocks.
Paramount Skydance led gains among major companies, with its stock jumping 9.8%. Despite reporting quarterly revenue and profit below Wall Street’s expectations, investors responded positively to the company raising its cost-cutting target to at least $3 billion, up from $2 billion previously. This was Paramount Skydance’s first earnings report since Skydance completed its acquisition of Paramount in August.
FedEx also contributed to market gains, rising 5.4% after increasing its profit forecast for the current quarter and predicting growth during this year’s holiday shopping season compared to last year.
These advances helped bring the S&P 500 within 0.6% of its all-time high set two weeks ago and offset a 3% drop in Nvidia shares. Nvidia remains influential due to its large market capitalization.
Japanese technology firm SoftBank disclosed it had sold its entire stake in Nvidia for $5.83 billion last month but continues to focus on artificial intelligence through investments such as OpenAI, which developed ChatGPT.
There is ongoing debate on Wall Street about whether enthusiasm for AI-related stocks will persist, as their rapid price increases have drawn comparisons to the dot-com bubble of 2000.
CoreWeave, a cloud platform provider supporting AI workloads, saw its shares fall by 16.3%. While CoreWeave reported better-than-expected revenue and a smaller loss than analysts anticipated, investors focused on supply-chain issues delaying a data center project and pushing some revenue into future quarters.
BigBear.ai gained 6.1% after posting stronger quarterly results than expected and announcing an agreement to acquire AskSage—a generative AI platform designed for national-security agencies—for $250 million.
At Tuesday’s close, the S&P 500 was up by 14.18 points at 6,846.61; the Dow climbed by 559.33 points to reach 47,927.96; and the Nasdaq composite slipped by 58.87 points to end at 23,468.30.
European markets also rose following mixed trading sessions in Asia. Japan’s Nikkei 225 edged down by 0.1%, despite SoftBank shares gaining after reporting profits above analyst forecasts and completing the sale of its Nvidia stake.
U.S bond markets were closed due to Veterans Day observances.
Yields have generally increased since Federal Reserve Chair Jerome Powell cautioned that additional interest rate cuts are not guaranteed in the near term. The Fed has already reduced rates twice this year as it attempts to support a slowing job market while monitoring inflation that remains above its target level of 2%.
The ongoing U.S government shutdown has delayed important economic reports on employment and other indicators, complicating efforts by policymakers and investors to assess economic conditions accurately.
A job tracker from Goldman Sachs indicates that employment growth slowed in October compared with September; factoring in deferred resignations among government workers suggests total U.S employment may have declined by about 50,000 jobs last month according to economist David Mericle.
This apparent softening of labor market conditions has led traders to estimate roughly a two-in-three chance that the Federal Reserve will cut interest rates at its December meeting based on CME Group data—a factor contributing further support for recent stock market records.
