Big Tech stocks saw gains led by Amazon’s $38 billion cloud deal with OpenAI and Cipher Mining’s $5.5 billion lease agreement supporting AI infrastructure, fueling optimism despite mixed overall market performance and cautious investor sentiment. Meanwhile, notable declines occurred with Kimberly-Clark’s sharp drop following a large acquisition announcement, and other sectors showed varied results amid ongoing valuation concerns and Federal Reserve comments.
As the trading day nears its close, the market shows a mixed performance with the Dow Jones Industrial Average down over 200 points, while the Nasdaq and S&P 500 finish slightly in the green. Investors appear cautious, awaiting clearer signals amid comments from Federal Reserve officials like Lisa Cook, who highlighted greater risks of labor market weakness than inflation resurgence but stopped short of endorsing further rate cuts. Valuation concerns linger, with some skepticism returning about whether current tech stock prices are justified, though demand for bonds and tech shares remains strong.
Earnings reports reveal some bright spots, particularly in the semiconductor sector. For example, a semiconductor device company Flight B reported second-quarter adjusted revenue and earnings per share above expectations, contributing to a strong year-to-date performance. However, the stock remains relatively unchanged in after-hours trading due to an ongoing acquisition by Skyworks. Overall, the S&P 500 saw most names decline, with only four sectors—consumer discretionary, tech, healthcare, and utilities—posting gains, while materials, consumer staples, and financials lagged.
Amazon stood out with a 4% gain by the close, driven by a major $38 billion cloud deal to supply OpenAI’s growing demand for computing power. This deal, along with continued supply constraints and strong demand for cloud infrastructure, has fueled optimism about the return on investment in tech spending. Similarly, Cipher Mining surged over 20% after signing a $5.5 billion lease agreement with Amazon to provide space and power for AI workloads, underscoring ongoing investment in AI infrastructure.
On the other hand, Kimberly-Clark shares plunged nearly 15% following its announcement to acquire KenView for roughly $40 billion, marking its worst single-day drop since 1987’s Black Monday. The deal raised investor concerns, contributing to the stock’s sharp decline. Other decliners included Charter Communications, which saw a 5% drop after multiple price target cuts, and rare earth stocks like EMP Materials, which fell amid news that China would suspend additional export controls on rare earth metals.
Palantir delivered a strong earnings beat, with adjusted EPS and revenue surpassing expectations and an upward revision of its full-year revenue forecast. The company reported significant year-over-year growth in its U.S. business segments, driving shares higher in after-hours trading. Meanwhile, health-focused companies Hims and Hers Health beat third-quarter revenue estimates but issued a somewhat disappointing fourth-quarter EBITDA outlook, causing some volatility in their stock price after hours. Overall, the AI and data analytics sector remains a key driver of market enthusiasm.