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WALL Street rallied on Monday, led by big gains in Nvidia, Palantir and other heavyweight AI-related companies following progress in Washington to end a record government shutdown. The longest government shutdown in U.S. history could end this week after a compromise that would restore federal funding cleared an initial Senate hurdle late on Sunday, though it was unclear when Congress would give final approval. "The government shutdown was continuing a lot longer than people had expected. There were concerns around the economy, about flights potentially being canceled and having a wider impact to the economy," said Chris Zaccarelli, Northlight Asset Management's chief investment officer. Heavyweight tech stocks rebounded from some recent losses. Last week, the S&P 500 technology sector index tumbled 4.2%. Nvidia, the world's most valuable company, AI data analytics firm Palantir and Tesla all surged. "This is a rebound after being slightly oversold last week. It's another example of the "buy the dip" mantra really acting quickly in the tech and AI space," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. "There is nothing structural hitting the AI theme. In fact, a lot of earnings reports have been really strong in that sector." According to preliminary data, the S&P 500 gained 103.48 points, or 1.54%, to end at 6,832.28 points, while the Nasdaq Composite gained 520.29 points, or 2.26%, to 23,524.82. The Dow Jones Industrial Average rose 385.12 points, or 0.82%, to 47,372.22. Airlines came under pressure as government-directed flight cuts and air traffic staffing absences disrupted U.S. air travel. United Airlines and American Airlines both dipped. On betting website Polymarket, the probability of an end to the shutdown this week stood at 88%. The longest federal shutdown in history has created a data gap for the Federal Reserve and markets alike, leaving them dependent on private data that has given a mixed picture of the economy. Some Fed officials reiterated their caution regarding the monetary policy decision at the central bank's next meeting, while Fed Governor Stephen Miran repeated his call for a big rate cut. Optimism around artificial intelligence has fueled a bull run in U.S. stocks this year, but concerns around monetization and circular spending within the sector drove a bout of selling recently. The Nasdaq last week marked its worst performance in over seven months. Meanwhile, third-quarter earnings season is nearly complete. Of the 446 S&P 500 companies that have reported, 83% have delivered better-than-expected earnings, according to data compiled by LSEG. Shares of health insurers dropped after the U.S. Senate struck a deal to end the 40-day federal shutdown without extending Affordable Care Act subsidies, setting up a December vote on the issue instead. Centene, Humana and Elevance Health each lost ground. Metsera slumped after Pfizer won a $10 billion bidding war to acquire the company. Eli Lilly shares hit an intraday record high after Leerink Partners upgraded its rating on the stock. - Reuters
