Dow Falls as Palantir Plunges – Is the AI Stock Boom Turning into a Bubble?
Stock trading to kick off November has been a tale of two markets. High-tech and growth stocks are extending their momentum, while old-line blue chips struggle. On Monday, the benchmark S&P 500 and Nasdaq Composite managed to close higher – up 0.17% and 0.46%, respectively – even as the Dow Jones Industrial Average fell nearly half a percentreuters.com. This split reflects the radically different fortunes of tech-focused firms versus more traditional industries. What’s driving the divergence? In large part, blockbuster tech news gave the Nasdaq a boost. E-commerce and cloud titan Amazon.com revealed a $38 billion deal with OpenAI – the maker of ChatGPT – to run OpenAI’s AI workloads on Amazon’s AWS cloudreuters.com. That surprise partnership instantly made Amazon a bigger player in AI and sent its stock surging 4%reuters.com. Meanwhile, chipmaker Nvidia – whose advanced processors are critical for AI – got a lift after U.S. President Donald Trump announced new export controls reserving Nvidia’s top GPUs for U.S. companiesreuters.com. Nvidia shares jumped ~2.2% on the newsreuters.com. These developments fueled the Nasdaq’s rally, since Amazon and Nvidia are heavyweight components of that index.