AI Optimism May Lead To Continued Strength On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Thursday, with stocks likely to extend the upward move seen over the past several sessions.

Optimism about the artificial intelligence trade may contribute to strength among tech stocks, as reflected by the 0.6 percent advance by the Nasdaq 100 futures.

AI darling and market leader Nvidia (NVDA) is jumping by 1.4 percent in pre-market trading, while fellow AI players Advanced Micro Devices (AMD) and Broadcom (AVGO) are surging by 3.2 percent and 3.5 percent, respectively.

The strength among AI stocks comes after OpenAI reportedly completed a deal placing a $500 billion valuation on the company.

With the sale of about $6.6 billion worth of stock by current and former employees, the ChatGPT owner has surpassed Elon Musk's SpaceX as world's most valuable privately-owned company.

"Reports suggest there was appetite for nearly twice as many as the actual number of shares on offer," said Russ Mould, investment director at AJ Bell.

The AI optimism may help traders continue to shrug off concerns about the economic impact of the ongoing U.S. government shutdown.

Due to the shutdown, the releases of reports on weekly jobless claims and factory orders that were scheduled for this morning have been indefinitely postponed.

Stocks came under pressure early in the session on Wednesday but staged a significant turnaround over the course of the trading day. The major averages climbed well off their lows of the session and into positive territory.

The major averages gave back some ground going into the end the day still finished higher. The Nasdaq climbed 95.15 points or 0.4 percent to 22,755.16, the S&P 500 rose 22.74 points or 0.3 percent to 6,711.20 and the Dow inched up 43.21 points or 0.1 percent to 46,441.10.

Due to the turnaround on the day, the major averages closed higher for the fourth straight session, with the Dow and the S&P 500 reaching new record closing highs.

The initial pullback came after the U.S. government officially shut down early this morning after lawmakers failed to pass a temporary spending bill.

Democrats have demanded that any stop-gap funding bill include an extension of enhanced Obamacare tax credits, while Republicans have argued the issue should be debated after a funding bill is passed.

However, the early selling pressure may have been offset by optimism about the outlook for interest rates following the release of private sector employment data.

While the release of the Labor Department's closely watched monthly jobs on Friday is likely to be delayed due to the shutdown, payroll processor ADP released a report this morning showing an unexpected decrease by private sector employment in the month of September.

ADP said private sector employment fell by 32,000 jobs in September after dipping by a revised 3,000 jobs in August.

Economists had expected private sector employment to climb by 50,000 jobs compared to the addition of 54,000 jobs originally reported for the previous month.

Bill Adams, Chief Economist for Comerica Bank, noted the ADP report could have outsize influence on the Federal Reserve's next interest rate decision if the shutdown lasts long enough to keep the Fed from seeing the September jobs report before their next meeting later this month.

The subsequent turnaround also came as analysts have pointed out that the markets have historically not been materially impacted by government shutdowns.

"On average, the S&P 500 has historically been about flat during shutdowns, with a slightly higher probability of gains vs. losses since 1976," said Jeff Buchbinder, Chief Equity Strategist for LPL Financial.

He added, "Considering that most of the losses came during the late 1970s, and the biggest decline during a shutdown since 1980 was 2.2%, history suggests stocks have a good chance of going higher during this shutdown, though past performance does not guarantee future results."

Pharmaceutical are extended the rally seen over the course of the previous session, driving the NYSE Arca Pharmaceutical Index up by 5.4 percent to its best closing level in almost seven months.

Considerable strength also emerged among computer hardware stocks, with the NYSE Arca Computer Hardware Index spiking by 3.9 percent to a record closing high.

The NYSE Arca Biotechnology Index also surged by 3.2 percent to a record closing high amid substantial strength among biotech stocks.

Healthcare, semiconductor and steel stocks also turned in strong performances on the day, while airline and financial stocks showed significant moves to the downside.

Commodity, Currency Markets

Crude oil futures are slipping $0.28 to $61.50 a barrel after falling $0.59 to $61.78 a barrel on Wednesday. Meanwhile, after jumping $24.30 to $3,897.50 an ounce in the previous session, gold futures are rising $10.70 to $3,908.20 an ounce.

On the currency front, the U.S. dollar is trading at 146.99 yen versus the 147.05 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1746 compared to yesterday's $1.1729.

Asia

Asian stocks advanced on Thursday, as tech stocks surged amid continued hype over artificial intelligence. Mainland Chinese markets remained closed for the National Day holiday.

Hong Kong 's Hang Seng Index jumped 1.6 percent to 27,287.12 as traders returned to their desks after a holiday.

Alibaba shares rallied 3.5 percent after JPMorgan raised its price target on the stock. Semiconductor giant SMIC soared nearly 13 percent on AI optimism as OpenAI unveiled Sora 2, its most advanced video generation model yet.

Japanese markets rebounded after four days of losses. The Nikkei 225 Index climbed 0.9 percent to 44,936.73, while the broader Topix Index settled 0.2 percent lower at 3,087.40.

Chip-related shares tracked their U.S. peers higher after reports emerged that Intel is in early talks to add AMD as a foundry customer.

Tokyo Electron surged 7.9 percent and Advantest rallied 2.5 percent. Banks fell, with Sumitomo Mitsui Financial, Mizuho Financial Group and Mitsubishi UFJ Financial losing 1-2 percent.

Seoul stocks led regional gains on optimism over artificial intelligence. The Kospi surged 2.7 percent to 3,549.21.

Samsung Electronics jumped 3.5 percent and SK Hynix spiked 10 percent after they signed an initial supply pact with OpenAI's Stargate project.

Investors shrugged off data that showed South Korean consumer prices rose at a slightly faster than expected pace in September.

Australian markets rallied, with banks and mining stocks leading the surge despite disappointing trade balance data. The benchmark S&P/ASX 200 Index jumped 1.1 percent to 8,945.90, while the broader All Ordinaries Index shot up 1.1 percent to 9,240.30.

Alkane Resources, Lynas Rare Earths, Pilbara Minerals and Northern Minerals gained 3-8 percent after the U.S. government reportedly offered to buy equity in Australian critical mineral companies as part of efforts to cut reliance on China.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index inched up 0.1 percent to 13,451.76.

Europe

European stocks are hovering near record levels on Thursday, with healthcare and chip-related stocks leading the surge. Investors believe that the U.S. government shutdown will be brief and possibly have a negligible macroeconomic impact.

Meanwhile, a weak private-sector payrolls report showing a surprising decline of 32,000 private sector jobs in September raised expectations on further Federal Reserve monetary easing.

Concerns over the Fed's independence also eased somewhat after the Supreme Court said it would decide if President Donald Trump can remove Lisa Cook from the U.S. central bank.

The German DAX Index and the French CAC 40 Index are both jumping by 1.5 percent, although the U.K.'s FTSE 100 Index is posting a modest gain, inching up by 0.1 percent.

U.K. financial services activity steadied last month after the sharpest fall since the pandemic, according to the CBI financial services survey.

ASML soared and ASM International have surged after Korea's Samsung Electronics and SK Hynix signed an initial supply pact with OpenAI's Stargate project.

Healthcare stocks are extending gains from the previous session after Pfizer struck a deal with the U.S. government on most-favored-nation pricing.

Worldline shares have soared in Paris. The global payment services provider has entered into a strategic partnership with YeePay, a Chinese payment provider in the airline and travel sector.

German chemicals maker BASF has also shown a strong move to the upside after confirming its 2028 financial targets. Supermarket group Tesco has also surged after raising its full-year profit forecast.

Meanwhile, British electricity and gas utility National Grid has fallen after reporting first-half fiscal 2026 trading in line with expectations.

U.S. Economic News

Dallas Federal Reserve President Lorie Logan is due to participate in a moderated conversation before the UT Evolving Energy and Policy Landscape Conference at 10:30 am ET.

At 11 am ET, the Treasury Department is scheduled to announce the results of this month's auctions of three-year and ten-year notes and thirty-year bonds.