Wall Street ended sharply higher on Monday, led by big gains in Nvidia, Palantir and other heavyweight AI-related companies following progress in Washington to end a record government shutdown. The longest government shutdown in U.S. history could end this week after a compromise that would restore federal funding cleared an initial Senate hurdle late on Sunday, though it was unclear when Congress would give final approval. Heavyweight tech stocks rebounded from some recent losses. Last week, the S&P 500 technology sector index .SPLRCT tumbled 4.2%.
Nvidia NVDA.O , the world’s most valuable company, rose 5.8%. AI data analytics firm Palantir PLTR.O jumped 8.8% and Tesla TSLA.O climbed 3.7%.
The S&P 500 climbed 1.54% to end the session at 6,832.43 points. The Nasdaq gained 2.27% to 23,527.17 points, its biggest one-day percentage gain since May 27. The Dow Jones Industrial Average rose 0.81% to 47,368.63 points. The small-cap Russell 2000 .RUT gained 0.9%, while the PHLX semiconductor index .SOX jumped 3%. Volume on U.S. exchanges was relatively light, with 17.9 billion shares traded, compared with an average of 20.8 billion shares over the previous 20 sessions.
Airlines came under pressure as government-directed flight cuts and air traffic staffing absences disrupted U.S. air travel. United Airlines UAL.O dipped 1.3% and American Airlines AAL.O fell 2.5%. On betting website Polymarket, the probability of an end to the shutdown this week stood at 88%. The longest federal shutdown in history has created a data gap for the Federal Reserve and markets alike, leaving them dependent on private data that has given a mixed picture of the economy. Some Fed officials reiterated their caution regarding the monetary policy decision at the central bank’s next meeting, while Fed Governor Stephen Miran repeated his call for a big rate cut.
Optimism around artificial intelligence has fueled a bull run in U.S. stocks this year, but concerns around monetization and circular spending within the sector drove a bout of selling recently. The Nasdaq .IXIC last week marked its worst performance in over seven months. Meanwhile, third-quarter earnings season is nearly complete. Of the 446 S&P 500 companies that have reported, 83% have delivered better-than-expected earnings, according to data compiled by LSEG.
Shares of health insurers dropped after the U.S. Senate struck a deal to end the 40-day federal shutdown without extending Affordable Care Act subsidies, setting up a December vote on the issue instead. Centene CNC.N dropped 8.8%, Humana HUM.N fell 5.4% and Elevance Health ELV.N declined 4.4%. Metsera MTSR.O slumped 14.8% after Pfizer won a $10 billion bidding war to acquire the company. Eli Lilly LLY.N rose 4.6% to a record high after Leerink Partners upgraded its rating on the stock.
Advancing issues outnumbered declining ones within the S&P 500 .AD.SPX by a 1.7-to-one ratio. The S&P 500 posted 32 new highs and 8 new lows; the Nasdaq recorded 106 new highs and 128 new lows.
Reporting by Twesha Dikshit and Purvi Agarwal in Bengaluru, and by Noel Randewich in San Francisco; Editing by Saumyadeb Chakrabarty, Krishna Chandra Eluri, Maju Samuel and David Gregorio.
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