AI Frenzy Fuels Record Wall Street Rally as Shutdown Drags On
On Monday, October 6, 2025, the U.S. stock market witnessed record-breaking highs, primarily fueled by investor enthusiasm surrounding artificial intelligence (AI) deals. The S&P 500 and Nasdaq Composite closed at all-time highs, while the Dow Jones Industrial Average dipped slightly. The market seemingly shrugged off concerns related to the ongoing federal government shutdown.
Major Indexes Extend Rally
The S&P 500 rose 0.4% to close at 6,740.28, reaching a new all-time high. The Nasdaq Composite jumped 0.7% to 22,941.67, also marking a record finish. This was the seventh consecutive advance for both indexes, driven by excitement around AI innovations. The Dow Jones Industrial Average, however, edged down 0.1% to 46,694.97.
AI Deals Power Gains
Advanced Micro Devices (AMD) emerged as a major catalyst, with its stock skyrocketing nearly 24% after announcing a partnership with OpenAI to supply AI chips. This deal could generate "tens of billions" in future revenue for AMD and potentially allow OpenAI to acquire a stake in the semiconductor firm. This news significantly boosted the Philadelphia Semiconductor Index by 2.9%. Tesla (TSLA) also saw a jump of 5-6% after teasing a new product launch.
Notable Stock Movers
AMD's gains came at the expense of rival Nvidia (NVDA), whose stock dipped 1%. Crypto-linked stocks rallied as Bitcoin breached $125,000 over the weekend, setting a new record. On the downside, AppLovin (APP) plunged 14% due to reports of an SEC probe, while Starbucks (SBUX) slid ~5% after an analyst warned of weaker Gen-Z spending. In M&A news, Comerica (CMA) spiked following an acquisition agreement by Fifth Third Bancorp, but Verizon (VZ) fell after replacing its CEO.
Sector Winners & Losers
High-growth sectors, particularly consumer discretionary stocks, outperformed on Monday. Other sectors logging solid gains included communication services, tech, energy, industrials, and utilities. Interest-rate-sensitive real estate lagged behind with the steepest decline. Oil prices ticked higher after OPEC agreed to a modest output increase, and gold futures rallied to briefly top $4,000 per ounce.
Shrugging Off the Shutdown
Traders largely ignored the U.S. federal government shutdown, which began on October 1. Despite the lack of new federal data, markets remained unfazed, betting that the shutdown’s economic impact will be minimal. Strategist Stephen Innes noted that traders are confident the shutdown will eventually resolve without lasting damage. President Donald Trump signaled some willingness to negotiate with Democrats to end the shutdown.
Fed Moves & Economic Signals
Investors are increasingly confident that the Federal Reserve will cut interest rates at its late-October meeting, with futures pricing in a high probability of a 0.25% rate cut. Traders are also eyeing alternative data for clues, as official indicators are delayed by the shutdown. Long-term Treasury yields have ticked up, but the prospect of easing inflation and rate cuts is keeping equity bulls optimistic.
Looking Ahead
Market experts caution that the AI-fueled optimism may eventually cool. Economist Jeremy Siegel argues that subdued money supply growth, easing price pressures, and a cooling job market create a "recipe for the Fed to continue easing." Analysts are also bracing for the kickoff of Q3 corporate earnings season next week, with S&P 500 profits forecast to rise ~8–9% year-over-year.
Noteworthy S&P 500 Movers
| Stock | Description |
|---|---|
| Advanced Micro Devices (AMD) | Shares surged after announcing a major AI partnership with OpenAI. |
| Monolithic Power Systems (MPWR) and Super Micro Computer (SMCI) | Other stocks with exposure to AI infrastructure also moved higher. |
| DoorDash (DASH) and Uber (UBER) | Received a shoutout from OpenAI and were among the day's top performers. |
| Tesla (TSLA) | Stock climbed after teasing a Tuesday event, raising speculation about a lower-priced EV. |
| AppLovin (APP) | Shares tumbled following reports of an SEC investigation. |
| Verizon (VZ) | Shares sank after naming former PayPal (PYPL) chief Dan Schulman as its new CEO. |
Why AppLovin Shares Plunged 14%
AppLovin (APP) shares experienced a significant drop due to an SEC investigation into the company's data-collection practices. Despite the losses, the stock remains up approximately 80% for 2025.
These Stocks Got a Boost From OpenAI's DevDay Buzz
A mention from OpenAI at its DevDay developer conference sent stocks of companies like Figma (FIG), Expedia (EXPE), Coursera (COUR), Uber (UBER), and DoorDash (DASH) higher. Advanced Micro Devices (AMD) also benefited greatly from its partnership announcement with OpenAI.
The Economy Shrugged Off Past Government Shutdowns, But This One Could Be Different
The historical impact of government shutdowns on the U.S. economy and financial markets has been minimal. However, threats of permanent layoffs of federal workers could potentially impact the labor market.
Late Tax Filers Face Potential Delays Amid Government Shutdown
The ongoing government shutdown may lead to delays in processing and communication with the IRS for taxpayers who filed for an extension to the October 15 deadline.
Here's What These Analysts Think of 'BNPL' Company Klarna's Stock After Its IPO
Analysts are optimistic about Klarna (KLAR) stock, with Deutsche Bank, Wedbush, and Bank of America initiating coverage with bullish ratings and price targets. They believe the stock has the potential to rise as the company's business expands.
Bitcoin Price Levels to Watch After Cryptocurrency Hits Record High Above $125,000
Bitcoin (BTCUSD) reached a new record high, climbing above $125,000. This rally has been fueled by a strong appetite for risk and investors using Bitcoin as a hedge against geopolitical uncertainty and government debt. Several crypto stocks are seeing benefits from this surge.
Micron's Record Run Isn't Over Yet, According to These Wall Street Bulls
Micron Technology's (MU) stock is set to move higher due to growing AI-driven orders. Morgan Stanley upgraded the stock, citing strong demand for its high-bandwidth memory.
What's Tesla Teasing? The Stock Is Rising as Investors Look Ahead to Tuesday
Tesla (TSLA) is generating excitement with a mysterious teaser, leading to speculation about a lower-priced EV. Investors are eagerly awaiting the company's announcement.
Boeing Stock Paces Dow on Report Plane Maker Is Set to Increase 737 Max Production Soon
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CEOs and Founders Warn AI Could Cause Widespread Job Loss and Reshape The Workforce
Business leaders are anticipating significant changes to the workforce as a result of artificial intelligence (AI). Some believe AI could replace many office jobs, leading to workforce reductions in certain areas.
Crypto Stocks Are Getting a Lift After Bitcoin's Price Touches a Record High
Bitcoin's record high is providing a boost to crypto stocks, including Bitcoin treasury Strategy (MSTR), Coinbase Global (COIN), Circle (CRCL), Marathon Digital parent company MARA Holdings (MARA), and Riot Platforms Inc. (RIOT).
Comerica Stock Jumps on $10.9B Takeover by Fifth Third Bancorp
Comerica (CMA) shares surged after Fifth Third Bancorp (FITB) agreed to purchase the financial firm. The acquisition will create the ninth-largest U.S. bank.
Verizon Stock Paces Dow Decliners After Company Replaces CEO
Verizon (VZ) shares tumbled after the company appointed former PayPal (PYPL) CEO Dan Schulman as its new chief executive, replacing Hans Vestberg.
AMD Stock Soars on OpenAI Partnership for AI Chips
AMD's stock soared following a significant partnership with OpenAI to supply AI chips. The deal could potentially lead to a significant revenue boost for AMD and the possibility of OpenAI taking a stake in the chip designer.
Klarna Rises as Deutsche Bank, Wedbush Initiate Stock at 'Buy' or Equivalent
Klarna (KLAR) shares received positive ratings from Deutsche Bank and Wedbush, citing strong growth prospects and potential for global expansion.
Wall Street Indexes Open Higher on AI Boost Amid Shutdown Worries
US stocks mostly gained on Monday as the federal government shutdown entered another week, while a megadeal between AMD (AMD) and OpenAI (OPAI.PVT) lifted hopes for the AI trade. The Nasdaq Composite (^IXIC) led the way higher, rising 0.7% to close at a fresh record high amid an over 23% rally from AMD. The S&P 500 (^GSPC) also gained 0.4% to notch an all-time high. The Dow Jones Industrial Average (^DJI), however, dropped 0.1%.
