Stocks Keep Rising as Amazon’s Deal Powers AI Bets: Markets Wrap

The start of a traditionally solid month on Wall Street saw stocks rising as Amazon.com Inc.’s $38 billion deal with OpenAI added fuel to the artificial-intelligence trade that’s powered the bull market.

A renewed advance in equities put the S&P 500 close to its all-time highs. The Nasdaq 100 climbed 1%. Amazon jumped about 5% as its cloud unit will provide the ChatGPT maker with access to hundreds of thousands of Nvidia Corp. graphics processing units as part of a seven-year deal.

Monday’s deal is the latest that saw another industry giant join the ranks of those building or retrofitting data centers to back OpenAI. The animal spirits surrounding the revolutionary technology overshadowed calls for market consolidation after a relentless surge since April’s meltdown.

“Despite the strong gains in equity markets this year, we continue to believe that this bull market has room to run and investors should position to benefit from the rally,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.

The S&P 500 rose to around 6,875. Palantir Technologies Inc., whose stock has surged about 385% over the past year amid AI optimism, will report earnings after the closing bell.

The yield on 10-year Treasuries advanced three basis points to 4.11%. The dollar edged up.

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 on Monday 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.

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. in a deal worth roughly $40 billion, providing a lifeline to the struggling Tylenol maker.

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 amid rising investor interest in the sector.

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.

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.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.5% as of 9:30 a.m. New York time

• The Nasdaq 100 rose 1%

• The Dow Jones Industrial Average was little changed

• The Stoxx Europe 600 rose 0.2%

• The MSCI World Index rose 0.3%

• Bloomberg Magnificent 7 Total Return Index rose 1.1%

• The Russell 2000 Index was little changed

• Amazon rose 4.7%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%

• The euro fell 0.3% to $1.1508

• The British pound fell 0.3% to $1.3119

• The Japanese yen fell 0.2% to 154.25 per dollar

Cryptocurrencies

• Bitcoin fell 2.2% to $107,566.01

• Ether fell 3.7% to $3,719.94

Bonds

• The yield on 10-year Treasuries advanced three basis points to 4.11%

• Germany’s 10-year yield advanced two basis points to 2.66%

• Britain’s 10-year yield advanced two 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 fell 0.2% to $60.88 a barrel

• Spot gold rose 0.2% to $4,009.56 an ounce