IXIC: Nasdaq Composite Jumps 0.7% to New Closing High, S&P 500 Follows Right Up

Just when you thought the AI narrative couldn’t get more stretched, OpenAI decided to strike another huge deal in the industry.

🔥 Record-Setting Session

• Optimism, bullishness, and green arrows everywhere. That’s the summary of this week’s trading kickoff. The Nasdaq Composite index IXIC climbed 0.7% during Monday’s cash session, notching a record closing high of 22,941.67.
• The S&P 500 index (SPX) wasn’t doing too bad, either. The broad-based Wall Street darling added 0.4% for a record of its own, clocking out at 6,740.28. It’s milestone after milestone out there. What’s up with that?
• Stock indexes were powering higher, largely riding on the news that OpenAI is teaming up with Nvidia rival AMD. The pair of tech mavens will be building out AI infrastructure in a deal that “is expected to deliver tens of billions of dollars in revenue” to AMD.

💎 What a Time to Be Alive

• The AI frenzy is still very much alive, despite multiple signs of overstretching, overheating, overfrothing, and other overly-inflated expectations. But really, can this novel industry open the floodgates of cash flow and profits?
• It will take a while before all that spending on AI can turn a profit. And there’s always the possible scenario where many of those big-ticket purchases and deals never make it in the black. But that’s irrelevant – now’s the time to build.
• Interest rates are once again moving lower and markets are eyeballing two more cuts by the end of the year. That means cheaper money to borrow, better labor-market conditions, and red-hot stock rallies.
• The results are obvious. The S&P 500 is sitting on its 32nd record close this year. The tech-heavy Nasdaq Composite is up nearly 60% from the early-April wipeout, sitting on its 29th record close of the year.

👀 What Else Is Making Moves?

• Stocks aren’t the only ones getting a boost. Gold prices XAUUSD this year are turning gold bugs into Scrooge McDucks, backstroking through piles of gold coins in impenetrable fortresses.
• The shiny stuff hit $3,977 per ounce early Tuesday and is up 52% since the start of the year. The prospects of lower rates drive demand for non-yielding gold, which gets more appealing as the opportunity cost diminishes.
• What else is rocketing? Bitcoin, of course. The orange token BTCUSD surged to a record $126,000 a pop late Monday as the US government shutdown and the economic blackout triggered a flight to non-fiat currencies (or currencies not backed by a government).