A street sign for Wall Street is seen outside the New York Stock Exchange in Manhattan, New York City
Wall Street's main indexes were set to open higher on Monday, building on last week's gains, as AMD's chip-supply tie-up with OpenAI became the latest in a series of AI deals and offset concerns around a prolonged federal government shutdown.
The equities rally has persisted despite cautious forecasts and warnings about elevated valuations, especially in tech, highlighting the extent of investor enthusiasm around AI.
"The dollar amounts around these partnerships and around the buildout of the infrastructure to support AI are getting to be really astounding," said Leah Bennett, chief investment strategist at Concurrent Asset Management.
AMD was the latest catalyst as its OpenAI
deal sent shares of the chip company up 33.2% premarket.
At 08:16 a.m. ET, Dow E-minis were up 101 points, or 0.21%, S&P 500 E-minis rose 28 points, or 0.41%, and Nasdaq 100 E-minis were up 232 points, or 0.93%.
The gains came despite the government shutdown stretching into its sixth straight day.
While the standoff in Washington has delayed the release of the closely watched nonfarm payrolls report, a slew of alternative indicators last week pointed to tepid hiring, reinforcing expectations that the Federal Reserve will cut rates by 25 bps at its next meeting.
Goldman Sachs expects the military pay date on October 15 to pressure lawmakers into ending their deadlock. If the shutdown stretches beyond that date, roughly 1.3 million uniformed military personnel would go unpaid, the brokerage said.
However, even if a deal is reached, the timeline for releasing delayed data remains uncertain, increasing the likelihood that the Fed will be operating with limited visibility into the economy at its upcoming meeting.
Analysts say that makes the third-quarter earnings season kicking off next week the true test of the rally. By the end of October, 68% of companies representing 72% of market cap will have reported, according to Goldman.
"While the government shutdown is the focus now, earnings and the Fed will soon take center stage. For as much noise as there is, these fundamentals are key catalysts for investors," said Bret Kenwell, U.S. investment analyst at eToro.
Among stocks, AMD rivals Nvidia and Broadcom fell 0.8% and 0.5%, respectively.
Crypto stocks gained with bitcoin near all-time highs. Coinbase Global rose 2.5%, Riot Platforms jumped 5.1% while MARA Holdings climbed 3.5%.
Tesla rose 2.3% after the electric vehicle-maker teased an event scheduled for Tuesday on social media platform X over the weekend.
Critical Metals climbed 63.3% after Reuters reported President Donald Trump's administration is discussing taking an equity stake in the development-stage mining company.
Comerica gained 12.9% after Fifth Third said it will buy the company in a deal valued at $10.9 billion. Shares in Fifth Third declined 2%. - Reuters
