The Nasdaq climbed more than 1% on Monday as technology shares staged a recovery ahead of a pivotal week for artificial intelligence-related concerns regarding the nation’s fiscal trajectory.
French government bonds and equities listed in Paris also declined, as widespread protests across the country highlighted the significant challenges the government faces in its efforts to curb a substantial deficit.
France’s central government requested that certain local authorities implement curfews on Monday, responding to mounting pressure over security lapses following incidents of looting linked to the ongoing protests.
<a Investors are buying the correction dip that we had," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“The market is now going to go through a very critical test over the next two weeks. We have some big-name earnings coming out,” he said. “In terms of technology, the test of whether or not the spending on AI… will be met with satisfaction is going to be critical.”
The Dow Jones Industrial Average fell 36.38 points, or 0.07%, to 51,966.03, the S&P 500 rose 31.29 points, or 0.41%, to 7,690.73 and the Nasdaq Composite rose 290.85 points, or 1.11%, to 26,430.89. MSCI’s gauge of stocks across the globe rose 0.88 points, or 0.08%, to 1,129.98.
Meta is one of five AI hyperscalers projected to increase their combined capital expenditure to approximately $1.2 trillion in the coming year.
Results from SpaceX are also anticipated on Tuesday. Overall, US corporate earnings are still projected to grow by roughly 30%, a trend largely fueled by expansion within the technology sector.
US Treasury yields moved higher on Monday, with the benchmark 10-year yield rebounding from its largest weekly decline in seven months as anxieties regarding the impact of elevated interest rates on AI stocks began to ease. The yield on the benchmark US 10-year Treasury note increased by 4.2 basis points to 5.14%.
The recent selloff in bonds had also heightened scrutiny regarding the massive funding requirements of the AI industry.
Regarding economic data, the National Association of Home Builders/Wells Fargo Housing Market index reported a three-point decline to 29 this month. This figure represents the lowest level since June 2012 and fell short of the 31-point estimate projected by economists surveyed by Reuters.
