[New York Market Briefing] New York stocks end mixed… AMD surges

The New York market closed mixed.

On the 6th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 46,694.97, down 63.31 points (0.14%) from the previous trading day. Meanwhile, the S&P 500 rose 24.49 points (0.36%) to 6,740.28, and the Nasdaq gained 161.16 points (0.71%) to 22,941.67.

The U.S. federal government shutdown entered its sixth day, but market participants are not yet overly concerned. Robert Edwards, chief investment officer (CIO) of Edwards Asset Management, said, "The stock market is currently ignoring the impact of the government shutdown and is focusing more on optimistic earnings outlooks and the possibility of additional rate cuts."

AMD struck a massive deal with OpenAI. Expectations that the large contract would elevate AMD's stature in the AI industry pushed the stock higher. AMD's shares surged 23.71% that day. The intraday maximum gain was 37.67%.

AMD and OpenAI announced that AMD will supply AI chips to OpenAI under a multi-year contract worth hundreds of billions of dollars annually, the two companies said. Under the deal, AMD will supply hundreds of thousands of graphics processing units (GPU) to OpenAI over several years, starting in the second half of next year.

AMD said the contract could generate hundreds of billions of dollars in annual revenue. Considering ripple effects, it sees more than $100 billion in new revenue over the next four years from OpenAI and other customers.

With the two companies' large-scale cooperation established, the PHLX Semiconductor Index also jumped 2.89%. Intraday, the gain widened to 4.53%.

TSMC, Lam Research, Applied Materials, and Arm rose around 3%. Conversely, Nvidia, which competes with AMD in the GPU industry, fell 1.12% on the day due to AMD's advance.

Warmth spread across tech stocks more broadly.

Big tech companies with market capitalizations above $1 trillion rose except for Apple, Broadcom, and Nvidia. Alphabet climbed more than 2% on hopes for AI industry growth. Tesla's stock rose more than 5% after posting a short video presumed to be of a new product, boosting expectations.

Meanwhile, mobile marketing firm AppLovin fell 14% after news that the U.S. Securities and Exchange Commission (SEC) opened an investigation into the practice of collecting data from social media. Shares of mid-sized U.S. bank Fifth Third Bancorp fell 1.4% despite news that it became the ninth-largest bank in the U.S. by assets after acquiring Comerica.

By sector, all sectors rose except healthcare, financials, consumer staples, and real estate. Consumer discretionary climbed more than 1%.

According to the CME FedWatch tool, federal funds futures reflected an 83.4% probability of a 50 bp rate cut by December. Late in the prior session, the probability was 86.3%. The CBOE volatility index (VIX) fell 0.28 points (1.68%) from the previous session to 16.37.

Song-ryeol Lee, Hankyung.com reporter yisr0203@hankyung.com