Nvidia does the heavy lifting
The S&P 500 rose 0.7 per cent and more than recovered its losses from last week, pulling within 1.8 per cent of its all-time high set earlier this month. The Dow Jones Industrial Average added 146 points, or 0.3 per cent, and the Nasdaq composite climbed 0.8 per cent.
The strongest lift for the market came from Nvidia, which rose 2.4 per cent. That helped the chip company recover some of its drop from three straight losing weeks, its longest such streak since June.
But stocks elsewhere in the artificial-intelligence industry remained unsettled. They've been swerving on worries about whether their industry's boom is under threat because of how expensive it's become for companies to borrow money to build data centres and buy more AI chips.
Meta's US$35bn share sale sends its stock up and down
Meta Platforms bounced up and down after outlining plans to raise US$35bn by selling stock to help pay for its AI investments. It also said it could raise another US$60bn by selling shares of a new class of its stock once it begins trading. Meta's stock initially dropped more than 2 per cent, but it quickly flipped to a gain and then pulled back to a loss of 1.9 per cent.
Meta said Nvidia, Advanced Micro Devices and Broadcom have already indicated they may buy a total of US$5bn of stock in its offering. Those are strong signals of interest from chip companies that stand to benefit from additional AI investments. But they also give fuel to critics of “circular financing” who say it raises the risk if AI isn't as successful as expected.
One big company at the centre of the AI boom, Anthropic, gave details Monday about how much money it's losing as it prepares to sell its stock on the publicly traded US market for the first time.
Big tech results could show whether AI spending is paying off
Profit reports from huge tech companies this week could offer more details about how spending on AI is going, and whether it's producing the profits and productivity that proponents promised.
Alphabet and Microsoft will report their latest quarterly results on Wednesday, with Amazon to follow on Thursday.
Companies across all industries are under pressure to report strong growth in their profits. Expectations for big growth are what allowed stock prices to run to records recently despite worries about high inflation, high interest rates and other concerns.
Verizon Communications fell 3.5 per cent even though it reported a stronger profit for the summer than analysts expected, as its revenue fell short of forecasts.
Roughly one out of every three stocks in the S&P 500 is scheduled to report its latest quarterly results this week.
Brazil's market slumps after Lula's surprise win
Beyond the US, Brazilian stocks fell sharply after President Luiz Inácio Lula da Silva won reelection in a result that surprised investors.
The worry among investors is that he could increase the government's spending and put more pressure on its debt. The Bovespa stock index in Brazil dropped roughly 14 per cent.
Other governments around the world are also feeling pressure because of high debt loads and strained budgets, including the United States. France has been at the centre of the worries recently following violent protests in the country.
But yields on French government bonds eased Monday, and its CAC 40 stock index rose 0.8 per cent for one of the world's better moves. Indexes also rose in other European markets following a mixed finish in Asia.
The European Central Bank and the Bank of Japan will be meeting to vote on interest rates later this week.
The Fed is expected to sit tight on Wednesday
In the US bond market, yields fell for longer-term Treasurys. The yield on the 10-year Treasury eased to 4.98 per cent from 5.00 per cent late Friday and from more than 5.30 per cent earlier this month.
The two-year Treasury yield rose to 4.71 per cent from 4.69 per cent late Friday. It more closely tracks expectations for what the Federal Reserve will do with overnight interest rates. The widespread expectation is that it will say on Wednesday that it is leaving the federal funds rate alone following its latest meeting.
The Fed last month hiked the fed funds rate for the first time in three years in hopes of slowing inflation, which has remained much higher than anyone would like.
Oil holds above US$110 a barrel
The price for a barrel of Brent crude swung between gains and losses through the day before settling at US$110.74, down 0.9 per cent. It remains near the high end of its range since the war with Iran began. The highest price for the most actively traded contract in the market for Brent crude since then is nearly US$120, reached in March.
