Wall Street rallied 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 US 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.
“The government shutdown was continuing a lot longer than people had expected. There were concerns around the economy, about flights potentially being cancelled and having a wider impact to the economy,” said Chris Zaccarelli, Northlight Asset Management’s chief investment officer.
Heavyweight tech stocks reversed some recent losses. Last week, the S&P 500 technology sector index tumbled 4.2%.
Nvidia, the world’s most valuable company, gained almost 5%. AI data analytics firm Palantir jumped 9% and Tesla added 4.1%.
“This is a rebound after being slightly oversold last week. It’s another example of the “buy the dip” mantra really acting quickly in the tech and AI space,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.
“There is nothing structural hitting the AI theme. In fact, a lot of earnings reports have been really strong in that sector.”
Optimism around artificial intelligence has fueled a bull run in US stocks this year, but concerns around monetization and circular spending within the sector drove a bout of selling recently.
The Nasdaq last week marked its worst performance in over seven months.
