Article by: Tide Research
On Monday, U.S. tech stocks rebounded, with the Nasdaq rising over 1% and the Philadelphia Semiconductor Index ending an eight-day losing streak, led by memory stocks. Amazon rose nearly 5%, and Tesla climbed nearly 4%, but the Dow Jones slipped slightly, with most S&P 500 sectors declining. Another major partnership in the AI sector was reported: Anthropic is reportedly negotiating a $45 billion compute deal with Nscale. Oil prices and interest rates continued to exert pressure, with WTI crude rising above $103 per barrel and the 10-year U.S. Treasury yield returning to around 5.14%.
Nasdaq rose 1.11%, but the tech rebound did not drive broad market gains.
As of the close of trading on Monday Eastern Time, the S&P 500 rose 0.41% to 7,690.73; the Nasdaq advanced 1.11% to 26,430.89; the Dow Jones fell 0.07% to 51,966.03. The VIX declined 7.75%, closing at 18.44.
Seven giants: five up, two down. Amazon rose 4.98%, Tesla rose 3.76%, NVIDIA rose 1.38%, Alphabet A rose 1.05%, and Microsoft rose 0.84%; Apple fell 0.15%, and Meta fell 0.55%.
The Philadelphia Semiconductor Index rose 1.61%, ending eight consecutive trading days of declines, with only four of its 30 components closing lower. Western Digital gained 6.09%, SanDisk rose 5.53%, Seagate increased 3.41%, and Micron advanced 2.97%. Intel climbed 2.43%, TSMC rose 1.84%, Broadcom gained 1.78%, and AMD increased 1.76%.
Chinese stocks edged lower, with the Nasdaq Golden China Index falling 0.27% to 5,680.44.
Of the 11 sectors in the S&P 500, seven closed lower. Consumer Discretionary rose approximately 2.7%, and Information Technology increased about 1.2%; Utilities fell around 2%, and Real Estate declined about 1.2%. The number of declining stocks on the NYSE was about 1.7 times the number of advancing stocks, with the index's gain primarily driven by a few large technology stocks.
CoreWeave rose sharply before pulling back. Goldman Sachs upgraded its rating from "Neutral" to "Buy" with a price target of $106; the stock initially surged over 7% in early trading but ultimately closed down 0.44% at $61.39.
U.S. Treasury yields rise, WTI climbs over $2
At the close of trading in New York, the 10-year U.S. Treasury yield was approximately 5.14%, and the 2-year yield was around 4.77%, both higher than the previous trading day.
Crude oil prices diverged. WTI November crude oil futures rose $2.22 to close at $103.66 per barrel; Brent December crude oil futures fell $0.28 to close at $109.55 per barrel. Supply concerns stemming from the Middle East situation persist, and energy prices and financing costs continue to influence market assessments of corporate profitability.
COMEX October gold futures fell 0.49%, closing at $4,139 per ounce. At the time of today’s review, Bitcoin was approximately $81,600 and Ethereum was approximately $2,400.
Anthropic reportedly renews discussions for a $45 billion compute partnership
According to Bloomberg, Anthropic is in talks with AI cloud computing company Nscale for a $45 billion compute deal involving the second facility at the Monarch data center campus in West Virginia, USA.
Nscale has received investment from NVIDIA. According to its IPO filing, Anthropic previously entered into an infrastructure agreement with the company worth up to approximately $44.6 billion. If the new transaction is finalized, the total value of their collaboration could approach $90 billion.
The negotiations are still ongoing, and the specific terms may be adjusted; neither party has announced a signing. The new facility is reportedly planned to have a capacity of approximately 460 megawatts, further expanding the computing power available to Anthropic.
This was also the day’s most notable development in the AI infrastructure space, beyond the rebound in chip stocks. Anthropic continues to seek large-scale computing power supply, but for related companies, the ultimate revenue generated from long-term contracts still depends on facility construction, power supply, and equipment delivery.
Amazon partners on 960 MW nuclear power project
Amazon rose nearly 5% on Monday, with Morgan Stanley naming it a top pick. On the same day, the company announced a new power partnership initiative.
American Electric Power (AEP) announced it will collaborate with Amazon and X-energy to study the development of an advanced nuclear power project in Indiana. The project is planned for a former coal-fired power plant site in Sullivan County, with a proposed deployment of up to 12 small modular reactors, totaling approximately 960 MW of capacity.
Amazon plans to provide upfront development funding and support the project through long-term power purchase agreements. The associated electricity will be connected to the local grid to meet power demands, including those of data centers.
The project is currently in the feasibility study and development phase. This collaboration signifies Amazon’s ongoing effort to secure long-term power sources for its data centers, but actual operation will require further development and approval.
Today's Focus
Pre-market U.S. stocks: General Motors, GE Aerospace, and RTX report earnings. Focus on automotive demand, aircraft engine and maintenance services, and the execution of aerospace and defense orders.
Beijing Time 20:30: U.S. September Housing Starts and Building Permits. With U.S. Treasury yields remaining elevated, housing construction data will help assess the impact of rising financing costs on real estate activity.
After-hours trading in the U.S. market, early Wednesday Beijing time: Netflix releases earnings. Focus on revenue, profit margins, progress in the advertising business, and guidance for the next quarter.