The S&P 500 rose on Wednesday, a day after it snapped a seven-day win streak because of a drop in Oracle that called to question the sustainability of the artificial intelligence trade. The U.S. government shutdown is also in its second week.
The Dow Jones Industrial Index surged 53.9 points to start Wednesday at 46,656.88.
The much broader index gained 26.85 points to 6,741.44
The tech-heavy NASDAQ spiked 164.24 points to 22,952.60.
Nvidia shares rose more than 1% after CEO Jensen Huang said that demand has risen in recent months, telling the media that “this year, particularly the last six months, demand of computing has gone up substantially.”
The move comes just a day after the AI chip darling finished lower in sympathy with Oracle shares in the wake of Oracle reportedly seeing lighter margins in its cloud business than analysts are currently forecasting and that the enterprise software company is losing money on some of its deals to rent out Nvidia’s chips.
That added to fears that the stock market is currently caught up in an AI bubble that harkens back to the late 1990s, when a feeding frenzy on early internet companies eventually led to the bursting of the dot-com bubble.
Many market observers are urging investors to rebalance their portfolios, while also acknowledging there could be further upside before the AI rally exhausts itself.
Meanwhile, the current government shutdown dragged into its eighth day Wednesday, with the Senate expected to vote once again later in the day to reopen the government. The chamber for the fifth time failed to pass a short-term funding bill Monday.
The stoppage has weighed little on equities thus far, but poses a greater risk to sentiment the longer it wears on.
Wall Street will also be awaiting the latest Federal Reserve minutes on Wednesday, which could give investors insight into the makeup of the Fed following a highly divisive September meeting.
Prices for the 10-year Treasury eked up soon after Wednesday’s open, reducing yields to 4.11% from Tuesday’s 4.12%. Treasury prices and yields move in opposite directions.
Oil prices captured 54 cents to $62.27 U.S. a barrel.
Gold prices hiked $58.70 to $4,063.10 U.S. an ounce.
