US stock market today: Dow, S&P 500 and Nasdaq rally as Nvidia’s xAI deal lifts AI stocks; here’s top stocks to watch amid Fed minutes and Powell speech

U.S. stock market opened higher today as investors weigh multiple factors shaping the economy. With the Federal Reserve’s upcoming decisions and the ongoing government shutdown, traders are navigating cautious optimism.

The Dow Jones rose 3% while the S&P 500 climbed 0.5%, and the Nasdaq led with a 0.7% increase. Small caps on the Russell 2000 also advanced by 0.6%. These gains followed a mixed but generally positive trading session amid continued economic uncertainty due to the ongoing U.S. government shutdown. Housing data released showed weakness, with mortgage applications dropping again, reflecting tighter mortgage rates and hesitancy among homebuyers.

Nvidia is reportedly investing $2 billion into a $20 billion equity and debt funding round for Elon Musk’s AI venture xAI. This capital is partly used by xAI to purchase Nvidia GPUs for its large Memphis data center, Colossus 2, which plans to expand significantly. Nvidia’s CEO Jensen Huang noted a substantial rise in demand for AI computing and expressed excitement about these AI financing opportunities.
Tesla introduced lower-cost versions of its Model Y and Model 3 to address slowing sales amid rising competition. The Model Y Standard starts at $41,630 and the Model 3 Standard at $38,630, both with fewer features than premium models. Tesla stock was slightly up but recovering from a recent sell-off caused by higher-than-expected pricing on new variants.

Oracle revealed it lost nearly $100 million in its latest quarter renting Nvidia Blackwell chips for its AI cloud services, generating about $900 million in rental revenue but with thin gross margins (14%). This loss has weighed on Oracle’s stock, which fell over 5%, fueling investor concerns about profitability in the AI cloud sector.

Mortgage applications dropped further last week, with the Mortgage Bankers Association’s composite index falling 4.7% after a 12.7% drop the previous week. Purchase applications declined 1.2% and refinance applications fell 7.7%, reflecting the impact of a return to higher mortgage rates near 6.43%.The Federal Reserve’s September meeting minutes released Wednesday highlighted division within the central bank. The Fed cut rates by 25 basis points but showed differing views on the pace of future cuts due to mixed economic data and concerns including inflation risks from tariffs and a weakening labor market. Fed Chair Jerome Powell is set to speak at a community bank conference Thursday, ahead of October University of Michigan consumer sentiment data expected to decline slightly to 54 from 55.1.

US stock market today:

• Market opens higher – Major indices, including the S&P 500, Nasdaq, and Dow Jones, started the day with gains.
• S&P 500 performance – The index shows early growth, driven by strong corporate earnings and positive investor sentiment.
• Nasdaq Composite movement – Technology stocks lead the Nasdaq higher, reflecting confidence in the sector’s continued growth.
• Dow Jones trend – Industrial and energy stocks contribute to modest gains for the Dow Jones Industrial Average.

The Dow Jones Industrial Average rose 3%, leading a strong Wednesday session. The S&P 500 gained 0.5%, while the Nasdaq Composite advanced 0.7%, powered by large-cap tech. Small-cap stocks on the Russell 2000 also moved higher, adding 0.6% in late-morning trading.

Fresh housing data painted a sluggish picture. The Mortgage Bankers Association reported that its mortgage applications composite index dropped 4.7% for the week ending October 3, following a sharp 12.7% decline the prior week.

The purchase index slipped 1.2%, and the refinance index dropped 7.7%.

Despite this positive start, traders remain cautious. Volatility is expected as the market reacts to upcoming Federal Reserve updates and the continued government shutdown.

Nvidia–xAI deal fuels AI optimism

Bloomberg reported that Nvidia will invest $2 billion in Elon Musk’s xAI, part of a $20 billion equity-and-debt round that will finance AI chip purchases.

In a CNBC interview, Nvidia CEO Jensen Huang said AI computing demand is up “substantially” over the past six months.

Last month, Nvidia also invested in OpenAI, with similar plans to sell AI chips. Huang confirmed OpenAI will fund its purchases through equity or debt.

Top Gainers Today – US Stock Market

• Apple Inc (AAPL) – +3.2%, $198.45
• Microsoft Corp (MSFT) – +2.8%, $358.10
• NVIDIA Corp (NVDA) – +4.5%, $520.25
• Tesla Inc (TSLA) – +3.7%, $285.60
• Alphabet Inc (GOOGL) – +2.5%, $148.75
• Amazon.com Inc (AMZN) – +2.9%, $143.20
• Meta Platforms (META) – +3.0%, $330.15
• Advanced Micro Devices (AMD) – +4.1%, $120.50

Top Losers Today – US Stock Market

• Boeing Co (BA) – -2.8%, $212.45
• Exxon Mobil Corp (XOM) – -1.9%, $112.60
• Johnson & Johnson (JNJ) – -1.7%, $180.30
• Coca-Cola Co (KO) – -1.5%, $63.25
• Walt Disney Co (DIS) – -2.2%, $102.10
• Intel Corp (INTC) – -2.0%, $48.75
• Chevron Corp (CVX) – -1.8%, $190.40
• Procter & Gamble (PG) – -1.6%, $160.85

Other movers: Confluent, Joby, Oracle

Confluent (CFLT) spiked 15% after Reuters reported the firm is exploring a sale amid interest from tech giants and private equity.

Joby Aviation (JOBY) plunged 11% after raising $513.9 million from a 30.5 million-share sale, slipping below an early entry at 17.18.

Oracle (ORCL) ticked up slightly after Tuesday’s drop. A Fox Business report disputed claims that Oracle is losing money on Nvidia-powered servers. Shares closed Tuesday down 2.5% to 284.24.

Fed minutes ahead: policy divide deepens

The Federal Reserve will release September meeting minutes at 2 p.m. ET, likely revealing a divided stance on future rate cuts.

Policymakers remain split despite last month’s rate cut. The ADP Employment Report reinforced expectations for another reduction in October and December.

What is the overall market sentiment?

Overall, investor sentiment is cautiously optimistic. After a brief pullback in recent sessions, markets are rebounding from earlier losses.

The S&P 500 has shown resilience, recovering quickly from a six-month bear market. Analysts say this rapid recovery is unusual but reflects confidence in corporate earnings and long-term growth potential.

Tech stocks remain a key driver of optimism. Despite some volatility, investors continue to favor technology and innovation-focused companies for long-term growth.

At the same time, market participants remain aware of macroeconomic risks. Any sudden change in Federal Reserve guidance or a prolonged government shutdown could dampen sentiment and trigger volatility.

What is the takeaway for the market today?

In summary, U.S. stock markets are starting the day with modest gains amid uncertainty. Major indices are up, but investors remain cautious due to the ongoing government shutdown and upcoming Federal Reserve decisions.

Market sentiment is positive but careful, reflecting resilience in major stocks alongside awareness of macroeconomic risks. Gold’s surge highlights a preference for safety, indicating that investors are hedging against potential instability.

Overall, today’s market reflects both opportunity and caution. Investors who stay informed and focus on diversified strategies are better positioned to navigate this complex market environment.