The stock market hit record highs early in the week, as Nvidia announced a big OpenAI deal. The major indexes then pulled back solidly, while extended growth stocks suffered bigger losses. But the indexes generally found support. Micron Technology crushed views and guided up, but expectations were high. Rising Treasury yields probably didn't help.
Stock Market Falls From Highs
The stock market rally started with record highs, buoyed by an Nvidia-OpenAI deal, but the major indexes retreated for solid weekly losses. They did find support at the 21-day line. Highly extended stocks suffered sharp losses, with some finding support and others not. Treasury yields continued to climb on stronger-than-expected economic data.
Inflation Tame, But Growth Data Strong
August inflation data showed moderate, but not worrisome price pressures as the Fed's key core inflation rate held at 2.9%. The Fed's thinking is that goods inflation will fade once the one-time price increase from tariffs is in the rear-mirror but it's not there quite yet.
On the other hand, the economic concerns that led the Fed to resume rate cuts this month seem to be ebbing. Personal consumption expenditures grew 0.6% in August, continuing recent strength. New jobless claims fell back near their lowest level since the start of the year, while ongoing claims of those who haven't found new jobs are at the lowest level since May. New-home sales also showed surprising strength, surging 20.5% to 800,000, yet that jump might be mostly revised away, some economists said.
Micron Delivers Big Beat
Memory-chip leader Micron Technology handily beat estimates for its fiscal fourth quarter and with its outlook, thanks to strong AI data center growth. Micron's earnings soared 157% year over year while sales rose 46% to $11.32 billion, For the current quarter, Micron forecast adjusted EPS up 109% with sales up 44% to $12.5 billion. Micron stock fell after the report amid high expectations and a broader retreat in AI-related chip stocks.
Nvidia Invests In OpenAI
Artificial intelligence chip giant Nvidia plans to invest $100 billion in ChatGPT creator OpenAI as part of a strategic partnership. Under the deal, OpenAI will deploy at least 10 gigawatts of AI data centers running Nvidia processors. Nvidia will invest in OpenAI progressively as each gigawatt of capacity is deployed, starting with the first gigawatt of systems scheduled for the second half of 2026. Critics say the deal is simply vendor financing that is circular in nature. Supporters say Nvidia could generate $300 billion to $500 billion in revenue from its $100 billion investment in OpenAI.
Quantum Stocks Still Buzzing
There's speculation that the Trump administration could soon unveil new U.S. quantum technology initiatives. The industry has been waiting to see if Congress passes the National Quantum Initiative Reauthorization Act, which would provide a funding boost for quantum computing companies as well as potential customers. The original National Quantum Initiative Act, passed in 2018 during President Trump's first term, lapsed in September 2023. Trump could issue executive orders, though, without endorsing new legislation. Another possibility is that the Trump administration could issue a national action plan similar to artificial intelligence. While China generally has been viewed as lagging the U.S. in quantum computing, it may be ahead in quantum communications, also called quantum networking. China has been testing secure quantum communications in fiber-optic and satellite networks. Shares of D-Wave Quantum, IonQ, Quantum Computing and Rigetti Computing continued to rally despite generally being extended.
Boeing Powers Up On News
Boeing rose modestly on a string of new orders and production news. The Dow Jones manufacturer on Monday secured a deal with Uzbekistan Airways for up to 22 of its 787s, which could be worth over $8 billion according to estimates from President Trump. Vietjet on Monday took delivery of its first 737-8 from Boeing as part of the airline's $32 billion order for over 200 planes. On Friday, Boeing announced that Norwegian Group placed an order for 30 737 planes, which marked its first direct Boeing order since 2017. The company also landed a massive order with Turkish Airlines for up to 225 planes, following a White House meeting between Trump and Turkish President Recep Tayyip Erdogan. Boeing is also close to a deal to sell as many as 500 aircraft to China, which would end a sales drought stretching back to 2017, according to Bloomberg. Meanwhile, the FAA may soon reapprove Boeing's authority to perform final safety checks for its 737 planes and lift the monthly production cap to 42 planes from its current limit of 38.
Costco Falls After Same-Store Miss
Costco Wholesale earnings rose 11% while revenue grew 8% to $86.2 billion, both beating, with e-commerce sales up 13.6%. But same-store sales missed views for a second-straight quarter. Multiple analysts slashed their price targets on COST stock after results. Shares fell to a five-month low.
Trump OKs TikTok Deal
President Donald Trump signed an executive order that cleared the way for a deal to sell TikTok's U.S. operations to a new investor group, which is expected to include Oracle. As described in the executive order, TikTok's Chinese parent company ByteDance will own less than 20% of TikTok's U.S. business with the rest held by "certain investors." Final details of the deal were still not clear. But the executive order claims that the arrangement would satisfy a 2024 law banning the short-video app unless ByteDance divests ownership. The deal would give U.S. investors oversight of TikTok's U.S. app, including its content-recommendation algorithm, and Oracle would secure its data and other parts of the operation.
KB Home Beats Views
Fiscal Q3 earnings sank 21% while revenue fell 7%. KB Home delivered 3,393 homes, down 7% decrease, with average selling prices edging down $475,70. CEO Jeffrey Mezger was encouraged by mortgage rates falling as the quarter wore on. Still, the homebuilder cut full-year housing revenue targets. Shares fell slightly for the week.
Stock Market News In Brief
Amazon will pay $2.5 billion to settle an FTC lawsuit that alleged the tech giant used deceptive methods to sign customers up for Prime memberships
Microsoft announced what it called "breakthrough" technology for cooling AI chips in data centers using microfluidics at the silicon level. Vertiv fell on the news as the data center infrastructure provider is a leader in liquid cooling.
Jabil beat forecasts for its fiscal fourth quarter and pointed to a strong year ahead thanks to AI data center business, but shares still fell. The contract electronics manufacturer's Q4 EPS grew 43% with sales up 18% to $8.3 billion.
Lithium Americas skyrocketed 120% to its highest levels since early 2024 after reports that President Trump wants to get a 10% stake as it renegotiates terms of the company's $2.26 billion Energy Department loan for its Thacker Pass lithium project. The White House has recently taken stakes in Intel and MP Materials. The government reportedly is mulling further stakes in rare earth companies like MP.
Centrus Energy jumped Thursday after announcing plans for a multibillion dollar expansion of its uranium enrichment facility in Ohio, citing some financing as well as utility purchase agreements. The Trump administration has been targeting increased domestic uranium production and infrastructure to support the AI data center buildout and national security efforts.
AutoZone earnings per share grew 1%, badly missing, while a 0.5% revenue gain to $6.24 billion was in line. Same-store sales were solid, while the auto parts retailer gave upbeat guidance.
TD Synnex delivered a 25% EPS gain, the second straight quarter of accelerating growth. Revenue rose 7% to $15.7 billion while the electronics wholesaler guided higher. Shares reversed strongly higher.
TG Therapeutics ramped early in the week ahead of an expected update for the company's drug, Briumvi. On Thursday, though, shares fell after TG said 89.9% of patients with relapsing multiple sclerosis had worsened while taking Briumvi for six years. The annualized relapse rate was 0.012, which equates to one relapse occurring every 83 years of patient treatment.
Tempus AI initially rocketed after the FDA cleared its new device to help drugmakers analyze RNA, but shares reversed lower and kept tumbling. Analyzing RNA is helpful in determining the mechanisms of disease and finding new pathways to attack it. This device is focused on cancer drug development.
UniQure catapulted nearly 250% on Wednesday after the biotech said its experimental gene therapy slowed Huntington's disease progression by 75% over three years. The company said patients showed a statistically significant improvement on a scale measuring Huntington's symptoms and in a key biomarker indicating damage to the central nervous system.
Oracle promoted Clay Magouyrk and Mike Sicilia to be co-CEO, as Safra Catz becomes executive vice chairman.
Alibaba CEO Eddie Wu said the China tech giant will exceed its previously announced plan to spend $53 billion over three years to develop AI infrastructure. Wu told an industry conference in China that "demand for AI infrastructure also far exceeded our anticipation." The news — paired with a new partnership with Nvidia focused on physical AI — boosted Alibaba stock to its highest level since October 2021.
Accenture said fiscal fourth-quarter earnings rose 9% while revenue grew 7% to $17.6 billion, both beating views. The IT and consulting giant guided low on fiscal 2026 revenue amid lower U.S. federal government spending. Shares hit their lowest level in nearly five years but pared losses.
