Dow Jones Industrial Average jumps 500 points on manufacturing surge, Oracle gains
|• The Dow Jones surged over 500 points on Monday as factory activity expanded for the first time in over a year.
• Oracle shares rallied after the company announced plans to raise up to $50 billion to expand cloud infrastructure.
• Gold and silver pared losses from Friday's historic crash, while bitcoin stabilized above $78,000.
• Friday's jobs report suspended as government shutdown keeps federal agencies underfunded.
The Dow Jones Industrial Average (DJIA) jumped over 500 points, or 1%, on Monday as Wall Street began February on a strong note, shaking off concerns from last week's precious metals rout. The S&P 500 rose 0.7%, buoyed by gains in Oracle Corporation (ORCL) shares following the company's announcement of a massive cloud expansion funding plan. The Nasdaq Composite gained 0.8%. Investors looked past recent losses in silver and bitcoin to focus on upbeat manufacturing data and a solid earnings season, with strategists noting that double-digit profit growth for a fifth consecutive quarter could help ease valuation concerns.
ISM manufacturing surges into expansion territory
US factory activity in January expanded for the first time in a year, the Institute for Supply Management reported Monday. The ISM manufacturing index jumped to 52.6, a 4.7-point increase from December and well ahead of the Dow Jones consensus estimate of 48.4. Prior to this reading, the index had been in contraction territory, below 50, for 26 consecutive months. The new orders index leapt 9.7 points to 57.1, its highest level since February 2022, while production surged 5.2 points to 55.9. Employment improved by 3.3 points to 48.1, though it remained below the 50 threshold, indicating growth.
Oracle rallies on cloud expansion plan; Nvidia slips on OpenAI doubts
Oracle Corporation (ORCL) shares climbed after the company announced Sunday that it plans to raise between $45 billion and $50 billion during 2026 to build additional cloud infrastructure capacity for major customers including Advanced Micro Devices Inc. (AMD), Meta Platforms Inc. (META), and OpenAI. Meanwhile, Nvidia Corporation (NVDA) fell 1% after The Wall Street Journal reported that the chipmaker's plans to invest $100 billion in OpenAI had stalled, with executives expressing doubt about the deal. The contrasting moves highlighted ongoing uncertainty about artificial intelligence investment returns even as hyperscalers continue committing massive capital to data center buildouts.
Metals and crypto stabilize after Friday's historic rout
Gold and Silver came off their lows on Monday, helping ease risk-off sentiment across markets. Spot Gold fell 4% while spot Silver dropped 7%, paring steeper losses from Friday when silver plunged around 30% in its worst single-day performance since 1980, and gold tumbled roughly 10%. Bitcoin fell below $80,000 for the first time since April, then stabilized above $78,000. The cryptocurrency's decline reflected investors taking risk off the table following the sharp precious metals selloff, though the recovery in metals prices helped trim equity losses and calmed jittery markets.
Earnings season on track for strongest growth in four years
More than 100 S&P 500 companies are set to report this week, including Amazon.com Inc. (AMZN) and Alphabet Inc. (GOOG), both of which traded higher Monday. Deutsche Bank strategists noted that earnings growth is on track to be the strongest in four years, with roughly 78% of reporting companies beating expectations, according to FactSet. The Walt Disney Company (DIS) reported results that topped analyst estimates but fell 4% after warning of headwinds from international travelers at domestic parks. The overall season has been solid despite some high-profile post-earnings declines, including Microsoft Corporation (MSFT).
Jobs report suspended amid ongoing government shutdown
The U.S. Bureau of Labor Statistics advised markets Monday that Friday's scheduled release of the January Nonfarm Payrolls report will be suspended until federal government operations resume. The agency's website noted that updates have been halted due to the suspension of federal services, with the last update occurring Monday. Late 2025 saw the longest government-funding freeze on record, and despite a short-term stopgap solution that provided operating cash through the end of January, Capitol Hill continues to struggle to reach a budgetary consensus, leaving key federal offices underfunded and economic data releases in limbo.
Dow Jones daily chart
AI stocks FAQs
First and foremost, artificial intelligence is an academic discipline that seeks to recreate the cognitive functions, logical understanding, perceptions and pattern recognition of humans in machines. Often abbreviated as AI, artificial intelligence has a number of sub-fields including artificial neural networks, machine learning or predictive analytics, symbolic reasoning, deep learning, natural language processing, speech recognition, image recognition and expert systems. The end goal of the entire field is the creation of artificial general intelligence or AGI. This means producing a machine that can solve arbitrary problems that it has not been trained to solve.
There are a number of different use cases for artificial intelligence. The most well-known of them are generative AI platforms that use training on large language models (LLMs) to answer text-based queries. These include ChatGPT and Google’s Bard platform. Midjourney is a program that generates original images based on user-created text. Other forms of AI utilize probabilistic techniques to determine a quality or perception of an entity, like Upstart’s lending platform, which uses an AI-enhanced credit rating system to determine credit worthiness of applicants by scouring the internet for data related to their career, wealth profile and relationships. Other types of AI use large databases from scientific studies to generate new ideas for possible pharmaceuticals to be tested in laboratories. YouTube, Spotify, Facebook and other content aggregators use AI applications to suggest personalized content to users by collecting and organizing data on their viewing habits.
Nvidia (NVDA) is a semiconductor company that builds both the AI-focused computer chips and some of the platforms that AI engineers use to build their applications. Many proponents view Nvidia as the pick-and-shovel play for the AI revolution since it builds the tools needed to carry out further applications of artificial intelligence. Palantir Technologies (PLTR) is a “big data” analytics company. It has large contracts with the US intelligence community, which uses its Gotham platform to sift through data and determine intelligence leads and inform on pattern recognition. Its Foundry product is used by major corporations to track employee and customer data for use in predictive analytics and discovering anomalies. Microsoft (MSFT) has a large stake in ChatGPT creator OpenAI, the latter of which has not gone public. Microsoft has integrated OpenAI’s technology with its Bing search engine.
Following the introduction of ChatGPT to the general public in late 2022, many stocks associated with AI began to rally. Nvidia for instance advanced well over 200% in the six months following the release. Immediately, pundits on Wall Street began to wonder whether the market was being consumed by another tech bubble. Famous investor Stanley Druckenmiller, who has held major investments in both Palantir and Nvidia, said that bubbles never last just six months. He said that if the excitement over AI did become a bubble, then the extreme valuations would last at least two and a half years or long like the DotCom bubble in the late 1990s. At the midpoint of 2023, the best guess is that the market is not in a bubble, at least for now. Yes, Nvidia traded at 27 times forward sales at that time, but analysts were predicting extremely high revenue growth for years to come. At the height of the DotCom bubble, the NASDAQ 100 traded for 60 times earnings, but in mid-2023 the index traded at 25 times earnings.
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