Tech stocks jump on AI euphoria as traders brush off shutdown

(Bloomberg/Natalia Kniazhevich) — US stocks advanced, driven by tech shares, after an OpenAI share sale valued the artificial intelligence company at an $500 billion.

The S&P 500 rose 0.3% as of 9:33 am in New York, while the Nasdaq 100 gained 0.5%.

Stocks climbed even as the US government shutdown stretched into a second day, causing a delay of weekly jobless claims and factory orders data. A separate report from outplacement firm Challenger, Gray & Christmas showed that US employers dialed back hiring plans in September, while announcing fewer job cuts.

For now, traders are more focused on riding the AI-led euphoria, which kicked into a higher gear after OpenAI employees sold stock in a deal that gave its valuation a substantial boost. Investors also cheered an AI infrastructure-related IPO of the Energy real estate investment trust Fermi. Shares jumped for a second day after its trading debut.

Bank of America Corp. derivatives strategists see scope to use options to bet on further gains for tech. If a 45% rally in the sector since early April looks like a bubble, it probably won’t burst any time soon, they said.

The options market shows investors’ bullishness on US stocks overall. Over the last 20 trading sessions, there has been an average of 40 million calls traded a day, by far the largest on record, Goldman Sachs Group, Inc.’s trading desk wrote citing data going back to 2010.

Retail traders remain bullish on stocks as well. Call options as a percentage of all options volume reached 65%. That’s one of the highest levels since 2022.

In tariff news, the EU plans to hike duties on its steel imports to 50%, according to a draft proposal.

Elsewhere, Tesla Inc. shares gained after a surprise increase in quarterly vehicle sales as US consumers accelerated electric-car purchases before federal tax credits expired. Stellantis NV shares gained gained after the maker of Jeep SUVs reported a gain in third-quarter US deliveries, sparking optimism about the group’s turnaround prospect. Rivian Automotive Inc. shares fell after it narrowed its vehicle delivery forecast for the full year.

Warren Buffett’s Berkshire Hathaway Inc. reached a deal to buy Occidental Petroleum Corp.’s petrochemical business for about $9.7 billion in cash.

Other notable movers include Planet Labs PBC, which jumped after Wedbush raised the target on the public Earth imaging firm to a street high, citing incremental demand for data satellite solutions. Bloom Energy Corp. shares fell after Mizuho Securities cut its recommendation on the fuel-cell power company to neutral from outperform as it sees growth being limited by production capacity.

–With assistance from Neil Campling.

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Originally Published: October 2, 2025 at 9:45 AM PDT