AI Euphoria Boosts Tech Stocks as Traders Brush Off Shutdown

U.S. equities advanced on Wednesday, led by technology names, after an OpenAI stock sale lifted the artificial intelligence company’s valuation to roughly $500 billion.

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The S&P 500 edged up 0.3% by mid-morning in New York, while the Nasdaq 100 climbed 0.5%, with tech shares at the forefront of gains. The rally came even as Washington remained locked in a government shutdown for a second day, delaying reports on weekly jobless claims and factory orders. A separate release from Challenger, Gray & Christmas showed companies slowed hiring plans in September and announced fewer layoffs.

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For now, Wall Street’s attention is firmly on the AI boom. Momentum surged after OpenAI employees sold shares in a deal that significantly boosted the firm’s valuation. Adding to the excitement, Energy real estate investment trust Fermi positioned as an AI-infrastructure play extended its post-IPO rally for a second straight session.

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Bank of America derivatives strategists say the surge in tech still has room to run. While a 45% advance in the sector since April might look frothy, they believe it won’t collapse anytime soon.

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The options market reinforces this optimism. Goldman Sachs traders noted that an average of 40 million call options have changed hands daily over the past 20 sessions the highest on record since 2010. Retail traders are contributing heavily, with calls accounting for 65% of all options activity, one of the strongest readings since 2022.

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Beyond AI enthusiasm, tariff developments also grabbed attention. A draft proposal from the European Union suggests steel import duties could rise to 50%, a move that could ripple through global trade.

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In the auto sector, Tesla shares rose after the company surprised markets with higher quarterly vehicle sales. U.S. consumers reportedly accelerated purchases of electric cars before federal tax credits expired, providing a near-term lift. Stellantis also gained ground after reporting stronger third-quarter deliveries, fueling hopes that the Jeep-maker’s turnaround strategy is taking hold. By contrast, Rivian shares slipped after the EV maker narrowed its full-year delivery guidance.

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In energy, Warren Buffett’s Berkshire Hathaway struck a nearly $9.7 billion all-cash deal to acquire Occidental Petroleum’s petrochemical unit. The purchase underscores Buffett’s confidence in the long-term potential of U.S. energy and chemicals, adding another high-profile transaction to Berkshire’s portfolio.

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Other Movers

Several individual stocks also made notable moves:

• Planet Labs PBC soared after Wedbush raised its price target on the satellite imaging firm to a Street high, citing rising demand for data-driven Earth observation.
• Bloom Energy Corp. slumped after Mizuho Securities downgraded the fuel-cell company to neutral, pointing to production capacity constraints that could cap growth.

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The market’s resilience in the face of political gridlock highlights just how powerful the AI narrative has become for investors. With record-breaking options activity and strong retail participation, optimism around technology remains a driving force. At the same time, sector-specific developments from autos to energy continue to shape opportunities across the broader market.

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