The U.S. stock market kicked off the week mixed as tech stocks kept the momentum going while the broader market lagged. The Nasdaq Composite (IXIC) rose by about 0.5%, driven by gains in big-tech and AI, while the S&P 500 (GSPC) edged up 0.1% and the Dow Jones Industrial Average (DJI) slipped roughly 0.5% amid a more cautious tone in non-tech sectors.

Investor optimism remains focused on the recent $38 billion deal between Amazon.com, Inc. (AMZN) and OpenAI for access to thousands of chips and AI infrastructure, and on momentum in companies tied to the AI build-out. At the same time, macro risks remain in view, including the ongoing government shutdown, weak manufacturing data, and a watchful eye on upcoming earnings from the biggest tech firms.

Market Movers:

  • Amazon (AMZN): Shares climbed nearly 6% after Amazon announced a large-scale partnership with OpenAI, which will use hundreds of thousands of chips from Amazon’s infrastructure, boosting investors’ expectations for Amazon’s role in the next phase of AI development.
  • Nvidia (NVDA): Up ~2-3% as the Amazon-OpenAI deal underscores demand for Nvidia-powered hardware, feeding into investor hope that Nvidia remains key to the growing AI hardware ecosystem.
  • Palantir (PLTR): Gained modestly as the firm continues to benefit from increased corporate and government spending on AI and data analytics platforms, signaling that even non-hardware tech names can ride the AI wave.
  • Super Micro Computer (SMCI): Mostly flat but in focus as the company is among the next batch of tech names set to report earnings and could benefit from the AI infrastructure build-out through server and data-center exposure.
  • Kimberly-Clark (KMB) / Kenvue (KVUE): The newly announced acquisition deal sparked a sharp move in both stocks, with Kenvue surging ~20% and Kimberly-Clark falling ~15%, illustrating how M&A chatter continues to contribute to separate pockets of activity beyond pure tech.

​AI Hardware Rally Takes Center Stage

The Amazon-OpenAI announcement has reignited a strong appetite among investors for AI-related stocks, particularly those tied to the hardware side of the ecosystem. With OpenAI gaining access to Amazon’s compute capacity, and by extension, chips and infrastructure likely provided by companies like Nvidia, it's clear that AI is not just a software story anymore. Investors are diving back into the infrastructure that powers the next generation of AI models.

This shift is helping amplify valuations in niche segments of the tech market and reinforcing the “go-big or go-home” mindset for many growth investors. Companies that can supply or scale infrastructure — servers, chips, cloud capacity — are being viewed not merely as vendors but as structural beneficiaries of a long-term AI investment cycle. That said, the upside is being balanced with caution: elevated valuations, supply-chain risks, geopolitical exposures, and inflation remain as ever-present caveats.

Macro & Data Backdrop Adds Nuance

While tech and AI dominate the headlines, the broader economy is sending mixed signals. Data from the manufacturing sector showed another month of contraction, underscoring persistent weakness in parts of the economy. Meanwhile, the U.S. government shutdown continues to hold back some key reports, increasing reliance on partial or private-sector data for market direction.

For many investors, this means a bifurcation in the market: tech and AI continue to press ahead, while more cyclical or data-sensitive sectors remain under pressure. The interplay between policy, data releases, earnings, and geopolitical developments will likely dictate whether the gains in tech can broaden into a more sustainable rally across the broader market.

Looking Ahead

With major tech earnings ahead, including several of the so-called “Magnificent Seven,” the coming sessions will provide clearer signals about whether the AI-driven optimism can translate into tangible results for the broader market. Investors should watch closely for guidance on capital expenditures, margin pressure, supply-chain outlooks, and incremental revenue growth tied to AI platforms.

At the same time, macro issues remain critical: how the Fed approaches monetary policy, whether data releases show any improvement, and how external risks like trade tensions or the government shutdown evolve. In short, the technology trade is firing on all cylinders, but cross-winds elsewhere mean the path forward is still far from smooth.