Tech Stocks Jump on Amazon Deal as Bitcoin Tumbles: Markets Wrap
(Bloomberg) — The start of a traditionally solid month on Wall Street saw tech stocks rallying as Amazon.com Inc.’s $38 billion deal with OpenAI added fuel to the artificial-intelligence trade. Bond yields rose. Crypto sold off.
A renewed advance in megacaps drove a gauge of the “Magnificent Seven” up 1.5%. The ChatGPT maker will pay Amazon Web Services for access to hundreds of thousands of Nvidia Corp. graphics processing units as part of a seven-year deal. Shares of the online retail giant jumped 5%. Despite the AI optimism, about 350 firms in the S&P 500 actually retreated.
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Monday’s deal saw another industry giant join the ranks of those building or retrofitting data centers to back OpenAI. The animal spirits surrounding the revolutionary technology confronted calls for broader-market consolidation after a relentless surge since April’s meltdown.
Traders also kept an eye on the few economic reports slated for this week. US factory activity shrank in October for an eighth straight month while inflationary pressures continued to ease.
Federal Reserve Bank of Chicago President Austan Goolsbee warned he’s more concerned about inflation than jobs. His San Francisco counterpart Mary Daly said officials should “keep an open mind” about the possibility a December cut. Governor Stephen Miran noted policy remains restrictive.
“Concerns over high valuations persist, and the Federal Reserve’s policy outlook appears murkier,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management. “Despite the strong gains in equity markets this year, we continue to believe that this bull market has room to run.”
The S&P 500 hovered near 6,860. Its equal-weighted version – which gives Dollar Tree Inc. as much clout as Apple Inc. – slid. Palantir Technologies Inc., whose stock has surged almost 400% over the past year, will report earnings after the close.
The yield on 10-year Treasuries rose three basis points to 4.11%. Bitcoin sank 2.5%. The dollar wavered.
“Near-term volatility remains likely as record bullishness increases risks to stocks from less than perfect news,” said Julian Emanuel at Evercore.
Investors’ seemingly unshakeable faith that equities can only go higher has one of Wall Street’s biggest optimists growing concerned that all the good vibes are waving a contrarian red flag.
Bulls have history on their side as November is historically the best month for returns over the past three decades. But the question is whether those year-end gains have already been priced into the market following one of the S&P 500’s best stretches since the 1950s.
“There are too many bulls,” says Ed Yardeni, founder of Yardeni Research. “Just one unexpected event could knock stocks down from their highs amid poor market breadth, but that may be tough to do, given that traders are usually optimistic around the holidays.”
With the Fed forcing investors to rethink a December rate cut, any notable deterioration in sentiment could lead to a market dip, according to Bret Kenwell at eToro.
“But given the S&P 500’s six-month and the Nasdaq’s seven-month win streaks, sidelined investors will likely welcome a pullback.” he added.
History reassures investors that the market’s previously impressive pace should not detract from its typical end-of-year run, according to Sam Stovall at CFRA.
“Despite a possible short and shallow digestion of recent gains, we continue to see share prices advancing through year-end on an improvement in earnings growth expectations, a further lifting of trade barriers, an end to the government shutdown, and another rate cut in December,” he said.
Since 1928, the S&P 500 has rallied 10% or more year-to-date through October 40 times, according to Bespoke Investment Group. Whenever that happened prior to 2025, November has seen an average gain of 2.6%, they noted.
“The old market axiom that ‘gains beget gains’ applies to this analysis, as years where the market is up big through October have typically seen better performance in November and December,” the strategists added.
“An upbeat earnings season has helped mitigate the missing macro perspective,” said Saira Malik at Nuveen. “Valuations appear stretched, but supported by improving earnings momentum and the prospect of lower costs of capital thanks to Fed easing.”
Malik notes that the prospect of fewer or slower rate cuts and the lack of macro clarity means equity markets will likely have to rely on resilient earnings growth as the main catalyst for extending this year’s rally.
US earnings for the third quarter have surpassed estimates at one of the highest rates on record so far, according to Goldman Sachs Group Inc. strategists.
“In our 25-year data history, this frequency of earnings surprises has been surpassed only during the COVID reopening period in 2020-2021,” the team led by David Kostin wrote.
The reporting season remains strong and it’s providing a solid foundation for US equities, but sentiment is a notch below the last reporting season, said RBC Capital Markets strategists led by Lori Calvasina.
“Macro commentary in last week’s S&P 500 earnings calls remained mixed and varied by sector, with the strongest tone coming out of tech and health care and the weakest tone coming from consumer,” they noted.
Results from US technology giants showed that the world’s biggest corporations are still pouring billions into AI infrastructure, cheering investors and bolstering the case for betting on the technology.
“Last week’s Magnificent Seven earnings were very impressive across the board, and we believe their updates and outlooks reinforce our continued conviction in the durability of the secular drivers across technology and AI,” said Anthony Saglimbene at Ameriprise.
Outside of near-term overbought conditions across technology and the broader market, which could spark a temporary pullback at some point before year-end, fundamental conditions among the market’s most owned stocks appear very strong and well-positioned heading into 2026, he noted.
“Quite clearly, in my mind, the path of least resistance continues to lead to the upside for equities into year-end, with earnings growth remaining very impressive indeed, coupled with the resilient underlying nature of the US economy, looser monetary backdrop, and strong seasonal tailwinds too,” said Michael Brown at Pepperstone.
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Corporate Highlights:
Microsoft Corp. has signed a roughly $9.7 billion deal to buy artificial intelligence computing capacity from IREN Ltd., becoming the Australian company’s largest customer. Microsoft is planning to spend more than $7.9 billion on data centers, cloud computing and employees in the United Arab Emirates over the next four years, capitalizing on a US government clearance to ship artificial intelligence chips to the Gulf nation. Nvidia Corp. can add trillions more to its valuation after making history as the first company to ever breach a $5 trillion market capitalization, according to at least one analyst. Loop Capital Markets raised its price target to a Street-high view of $350, up from $250. Alphabet Inc. is looking at selling about $15 billion of bonds in the US, and launched the sale of €6.5 billion ($7.48 billion) of notes in Europe, adding to a wave of borrowing from technology companies as they invest aggressively in artificial intelligence. Cisco Systems Inc. unveiled a new all-in-one product that’s meant to help retail stores, health care facilities and factories use artificial intelligence with a single rack of equipment, part of the company’s push to take a bigger role in AI. Walt Disney Co. asked YouTube TV to restore the broadcast of its ABC network for Election Day, as a fight over distribution fees drags on. Pfizer Inc. accused Novo Nordisk A/S of trying to stifle competition in the weight-loss market by attempting to acquire obesity startup Metsera Inc., the second lawsuit in four days as Pfizer tries to retain its grip on a deal that Novo upended last week. Kimberly-Clark Corp. agreed to buy Kenvue Inc. for roughly $40 billion, snapping up the embattled Tylenol maker’s storied brands in a gamble that would vault the Kleenex producer into consumer health’s top tier. Eaton Corp. agreed to buy liquid cooling specialist Boyd Thermal for $9.5 billion to capitalize on heavy demand related to artificial intelligence data centers. Permian Basin explorer SM Energy Co. agreed to buy rival Civitas Resources Inc. in an all-stock transaction for about $2.8 billion, the latest move to consolidate the US shale industry. Coeur Mining Inc. agreed to acquire New Gold Inc. for about $7 billion in an all-stock deal that consolidates two midsize North American gold producers as surging bullion prices have reignited investor interest in the sector. Airbus SE delivered 78 aircraft in October, according to people familiar with the matter, as the planemaker inches towards an ambitious annual target that it said remains within reach even as component shortages persist. UBS Group AG is selling its first bonds since a court decision raised questions about the Swiss lender’s possible exposure to previously canceled AT1 debt. BBVA SA raised Additional Tier 1 capital for the first time since its lost pursuit for country peer Banco Sabadell SA was voted down by shareholders last month. Ryanair Holdings Plc expects to exceed its passenger growth target for the full year as the airline receives aircraft early from Boeing Co. and demand for travel remains strong. BP Plc agreed to divest stakes in US shale assets to Sixth Street for $1.5 billion as it seeks to shore up its balance sheet and win back investor confidence. UniQure NV plunged after the drug developer said US regulators deemed the clinical data for its experimental gene-therapy for Huntington’s disease as insufficient. Xanadu Quantum Technologies Inc. said it will go public through a merger with Crane Harbor Acquisition Corp., a US special-purpose acquisition company, in a deal that values the combined business at about $3.6 billion. What Bloomberg Strategists say…
A strong third-quarter earnings season and a narrowing tape can coexist — but the mix argues for caution as the rally grows more fragile. When leadership is this concentrated and sentiment this crowded, even a small wobble in the mega-cap growth story or an unexpected macro headwind can trigger outsized moves lower.
-Michael Ball, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.3% as of 1 p.m. New York time The Nasdaq 100 rose 0.6% The Dow Jones Industrial Average fell 0.4% The MSCI World Index rose 0.2% Bloomberg Magnificent 7 Total Return Index rose 1.6% The Russell 2000 Index fell 0.4% Amazon rose 4.8% S&P 500 Equal Weighted Index fell 0.5% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1530 The British pound was little changed at $1.3144 The Japanese yen fell 0.1% to 154.16 per dollar Cryptocurrencies
Bitcoin fell 2.3% to $107,438.61 Ether fell 5.1% to $3,664.17 Bonds
The yield on 10-year Treasuries advanced three basis points to 4.11% Germany’s 10-year yield advanced three basis points to 2.67% Britain’s 10-year yield advanced three basis points to 4.43% The yield on 2-year Treasuries advanced three basis points to 3.60% The yield on 30-year Treasuries advanced four basis points to 4.69% Commodities
West Texas Intermediate crude rose 0.4% to $61.22 a barrel Spot gold rose 0.1% to $4,007.07 an ounce ©2025 Bloomberg L.P.
