AI fever and Wall Street caution: A tale of two markets
November’s first days unfolded with the energy of a blockbuster, but also the tension of a thriller. The US stock market was abuzz as AI giants set records, while whispers of caution from Wall Street icons floated in the background. It felt like watching a football match where the star forwards kept scoring, yet most of the team quietly limped off the pitch.
The AI engine that won't stop
The big story on the trading floor was artificial intelligence. Amazon soared to a new all-time high after announcing a $38 billion deal with OpenAI. As soon as the news hit, traders dialled up their buy orders. Nvidia, never far behind in the AI stakes, jumped as well, thanks to a new agreement putting its chips in the United Arab Emirates’ data centres. “Scaling frontier AI requires massive, reliable compute,” said OpenAI CEO Sam Altman. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone”.
Across the Nasdaq and S&P 500, the impact was immediate. Tech titans led the charge; the Nasdaq rose 0.5% and the S&P 500 edged higher. Yet beneath the surface, the mood was less jubilant. Over 300 S&P 500 stocks spent the day treading water or sliding lower. As Amazon and Nvidia spiked, scores of smaller names saw losses stack up. Andy Jassy, Amazon’s CEO, painted a confident picture: “New multi-year, strategic partnership with OpenAI will provide our industry-leading infrastructure for them to run and scale ChatGPT inference, training, and agentic AI workloads,” he posted on X.
Individual winners flashed green, IDEXX Laboratories leapt 15% on earnings, and Incyte jumped 9%. But it was clear: a handful of giants carried most of the market’s weight, while the ‘average’ stock lagged behind.
Storm clouds from the Street
Even as trading screens glowed with AI optimism, voices of caution grew louder. Goldman Sachs CEO David Solomon didn’t mince words. “It is probable that equity markets will experience a 10 to 20% decline within the next 12 to 24 months. Markets have their runs, followed by pullbacks that allow for reassessment,” Solomon warned investors. He added, “Experiencing a 10 to 15% decline is common, even in positive market cycles. It doesn’t alter your fundamental or structural beliefs regarding capital allocation”.
Morgan Stanley analysts echoed the sentiment. They highlighted concerns about a “frothy” environment, where valuations for AI-linked shares outpaced earnings. Behind the curtain, classic risks like slowing wage growth and rising commercial real estate delinquencies returned to the spotlight. Even with November’s reputation as a strong month for US equities, the uncertainty couldn’t be ignored.
What does this all mean for the average investor? In short: keep an eye on the stars, but don’t forget the team. The AI revolution, supercharged by Amazon and OpenAI’s blockbuster deal, promises to shape the next chapter. But as Wall Street’s most seasoned voices remind us, markets have a way of evening things out in the end. Stay alert, and enjoy the show.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.
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November’s first days unfolded with the energy of a blockbuster, but also the tension of a thriller. The US stock market was abuzz as AI giants set records, while whispers of caution from Wall Street icons floated in the background. It felt like watching a football match where the star forwards kept scoring, yet most of the team quietly limped off the pitch.
The AI engine that won't stop
The big story on the trading floor was artificial intelligence. Amazon soared to a new all-time high after announcing a $38 billion deal with OpenAI. As soon as the news hit, traders dialled up their buy orders. Nvidia, never far behind in the AI stakes, jumped as well, thanks to a new agreement putting its chips in the United Arab Emirates’ data centres. “Scaling frontier AI requires massive, reliable compute,” said OpenAI CEO Sam Altman. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone”.
Across the Nasdaq and S&P 500, the impact was immediate. Tech titans led the charge; the Nasdaq rose 0.5% and the S&P 500 edged higher. Yet beneath the surface, the mood was less jubilant. Over 300 S&P 500 stocks spent the day treading water or sliding lower. As Amazon and Nvidia spiked, scores of smaller names saw losses stack up. Andy Jassy, Amazon’s CEO, painted a confident picture: “New multi-year, strategic partnership with OpenAI will provide our industry-leading infrastructure for them to run and scale ChatGPT inference, training, and agentic AI workloads,” he posted on X.
Individual winners flashed green, IDEXX Laboratories leapt 15% on earnings, and Incyte jumped 9%. But it was clear: a handful of giants carried most of the market’s weight, while the ‘average’ stock lagged behind.
Storm clouds from the Street
Even as trading screens glowed with AI optimism, voices of caution grew louder. Goldman Sachs CEO David Solomon didn’t mince words. “It is probable that equity markets will experience a 10 to 20% decline within the next 12 to 24 months. Markets have their runs, followed by pullbacks that allow for reassessment,” Solomon warned investors. He added, “Experiencing a 10 to 15% decline is common, even in positive market cycles. It doesn’t alter your fundamental or structural beliefs regarding capital allocation”.
Morgan Stanley analysts echoed the sentiment. They highlighted concerns about a “frothy” environment, where valuations for AI-linked shares outpaced earnings. Behind the curtain, classic risks like slowing wage growth and rising commercial real estate delinquencies returned to the spotlight. Even with November’s reputation as a strong month for US equities, the uncertainty couldn’t be ignored.
What does this all mean for the average investor? In short: keep an eye on the stars, but don’t forget the team. The AI revolution, supercharged by Amazon and OpenAI’s blockbuster deal, promises to shape the next chapter. But as Wall Street’s most seasoned voices remind us, markets have a way of evening things out in the end. Stay alert, and enjoy the show.
Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.
Ready to earn on every trade?
Invest in 11,000+ US stocks & ETFs