Stock market today: S&P 500, Nasdaq rebound as Amazon earnings revive faith in Big Tech

US equities concluded Friday with significant weekly and monthly gains, largely propelled by strong Big Tech earnings, particularly from Amazon and Apple, which alleviated concerns about AI infrastructure spending and sent their shares to record highs. Nvidia also saw gains on strategic AI chip deals in South Korea, while major energy firms Exxon and Chevron surpassed Q3 earnings estimates, increasing production despite lower oil prices. This market optimism was somewhat tempered by hawkish comments from Federal Reserve officials, who expressed a preference to hold rates steady due to inflation concerns, leading to a reduction in market expectations for a December rate cut.

Analysis

US equities closed Friday with significant weekly and monthly gains, driven primarily by robust Big Tech earnings. The Nasdaq Composite achieved its seventh consecutive monthly victory, gaining over 4% for the second month in a row, while the S&P 500 and Dow also extended their winning streaks to six months. This broad market optimism, reflected in a "strongly positive" sentiment, was largely fueled by strong corporate results.

Amazon (AMZN) shares surged approximately 10% to an all-time high after its Q3 results significantly surpassed forecasts, with Amazon Web Services (AWS) revenue jumping 20%, indicating renewed enterprise cloud demand. Apple (AAPL) also reached a new record on stronger-than-expected results and positive holiday quarter guidance. Nvidia (NVDA) saw gains from new deals to supply up to 260,000 AI chips to South Korea, reinforcing its "sovereign AI" market push and easing concerns about AI infrastructure spending.

However, this bullish sentiment was partially tempered by hawkish remarks from Federal Reserve officials, including Kansas City Fed president Jeff Schmid and Dallas Fed president Lorie Logan, who preferred to hold rates steady due to persistent inflation concerns. This led to a reduction in market expectations for a December rate cut, with only 60% of traders now anticipating one, down from over 90% a week prior. Meanwhile, energy supermajors Exxon Mobil (XOM) and Chevron (CVX) both beat Q3 earnings estimates, increasing production despite a 3% monthly decline in crude oil prices.

Key Decisions for Investors

• Investors should maintain exposure to Big Tech, particularly companies demonstrating strong AI and cloud revenue growth, as these segments continue to drive market performance
• Monitor Federal Reserve communications closely for shifts in monetary policy outlook, as hawkish commentary could impact interest rate expectations and broader market sentiment
• Consider the long-term strategic positioning of energy majors like Chevron, which are increasing production and acquiring resources despite current oil price volatility
• Evaluate companies undergoing strategic M&A or stock splits, such as Netflix, for potential value creation or increased liquidity