Big Tech stocks and other market leaders are driving early gains on Wall Street as the U.S. stock market recovers from last week’s losses. The S&P 500 climbed 1.1% early Monday, the Dow Jones Industrial Average rose 261 points, and the Nasdaq Composite jumped 1.6%. U.S. chipmaker Nvidia (NASDAQ:NVDA) helped lead the rally, reflecting renewed investor confidence in artificial intelligence trends.
Government Shutdown and Market Reaction
Investor optimism comes as hopes rise for an end to the longest federal government shutdown in U.S. history. Futures for the S&P 500 climbed 0.9%, Dow Jones futures gained 0.4%, and Nasdaq futures jumped 1.5%, fueled largely by technology shares. Airlines also saw gains as expectations grew that the government may reopen soon.
However, health insurers faced early losses amid ongoing uncertainty about expiring health care tax credits. Cigna (NYSE:CI), UnitedHealth Group (NYSE:UNH), and Humana (NYSE:HUM) fell between 1% and 2% in premarket trading, while smaller health care companies saw declines up to 9%.
Tech Sector Rebounds
Monday’s gains were led by a rebound in technology shares as investor concerns over soaring AI-related stock prices appeared to ease. Micron Technology (NASDAQ:MU) surged more than 5% in premarket trading, while Seagate Technology (NASDAQ:STX) and Super Micro Computer (NASDAQ:SMCI) each rose about 4.5%.
This rebound comes as more than 90% of S&P 500 companies have reported quarterly earnings, with many exceeding Wall Street expectations. The technology sector, in particular, continues to show strong growth according to FactSet data, helping restore confidence after last week’s market drop.
Corporate Earnings and Economic Outlook
Corporate profits and forecasts remain under close scrutiny as investors assess whether the market’s high valuation is justified. The U.S. government shutdown has delayed key economic data on inflation and employment, critical indicators for the Federal Reserve and traders.
The Fed has already cut interest rates twice this year to support growth amid weakening employment. Yet, with inflation still above the 2% target, further cuts could worsen price pressures. Wall Street largely expects another rate reduction at the Fed’s December meeting to stimulate economic activity.
Global Markets Join Wall Street’s Rally
International markets mirrored the U.S. optimism. Germany’s DAX gained 1.7%, Paris’ CAC 40 rose 1.3%, and Britain’s FTSE 100 climbed 1%. In Asia, South Korea’s Kospi added 3%, lifted by SK Hynix (KRX:000660), which surged 4.5% in collaboration with Nvidia on AI projects. Samsung Electronics (KRX:005930) rose 2.8%.
Tokyo’s Nikkei 225 increased 1.3%, supported by AI-driven chipmaker Tokyo Electron (TYO:8035), which surged 4.3%. Hong Kong’s Hang Seng gained 1.6%, Shanghai Composite rose 0.5%, Australia’s S&P/ASX 200 picked up 0.8%, Taiwan’s Taiex jumped 0.8%, and India’s Sensex climbed 0.3%.
Looking Ahead
Investors are focused on how U.S. lawmakers will resolve expiring health care subsidies and finalize a government funding deal. Meanwhile, Big Tech stocks continue to drive market momentum, with AI-related companies at the forefront. As quarterly earnings and economic indicators gradually return, Wall Street will remain attentive to both tech sector performance and broader macroeconomic conditions that could influence market stability.
The coming weeks will be critical for Big Tech stocks, as investors weigh the potential impact of AI developments, global economic indicators, and U.S. political decisions. Companies with strong AI pipelines, robust earnings, and international exposure may continue to outperform the broader market. Traders are also monitoring whether renewed confidence will sustain the current rally or if volatility could return, particularly if Washington delays a resolution on health care subsidies or economic data reveals further weakness.
In addition, analysts suggest keeping an eye on smaller-cap technology firms that could benefit from AI expansion, as they may see accelerated growth and investor interest. With Wall Street closely watching both domestic and global developments, Big Tech stocks remain at the center of market attention and are expected to continue shaping early 2025 investment trends.
Featured Image: Freepik
