An AI and ‘everything else’ market in play in the U.S.

The divergence between the performance of the Dow Jones Industrial Average and Nasdaq Composite on Wednesday stateside reinforces the suggestion that there are two markets operating in the U.S.: one of an artificial intelligence and another of “everything else.”

Not only did the Dow rise, it also secured its second consecutive record high and closed above the 48,000 level for the first time.

The index, which comprises 30 blue-chip companies, is typically seen as a marker of the “old economy.” That is to say, it is mostly made up of large, well-established companies driving the U.S. economy, such as banks, healthcare and industrials, before Silicon Valley became a mini sun powering everything.

And it was those stocks — Goldman Sachs, Eli Lilly and Caterpillar — that lifted the Dow on Wednesday.

To be sure, new and flashy names, such as Nvidia and Salesforce, constitute the Dow too. But as the index is price-weighted, meaning that companies with higher share prices influence the Dow more, tech companies don’t exert as much gravity on it.

That’s in contrast to the Nasdaq, which is weighted by companies’ market capitalization, and dominated mainly by technology firms. The tech-heavy index fell as shares like Oracle and Palantir slipped — even Advanced Micro Devices’ 9% pop on its growth prospects couldn’t rescue the Nasdaq from the red.

It’s not necessarily a warning sign about overexuberance in AI.

“There’s nothing wrong, in our view, of kind of trimming back, taking some gains and re-diversifying across other spots in the equity markets,” said Josh Chastant, portfolio manager of public investments at GuideStone Fund.

But what investors would really like is if fork in the road merges into one. That tends to be the safer path to take.

The Dow Jones Industrial Average notches record. The 30-stock index climbed 0.68% Wednesday stateside to close above 48,000 for the first time. The S&P 500 was mostly flat and the Nasdaq Composite fell 0.26%. The pan-European Stoxx 600 gained 0.71%.

Anthropic to spend $50 billion on U.S. AI infrastructure. Custom data centers will be first built in Texas and New York and go live in 2026, with more locations to follow. The facilities will be developed with Fluidstack, an AI cloud platform.

U.S. October jobs and inflation data might not be released. White House press secretary Karoline Leavitt told reporters that part of the fallout of the government closure could be lasting damage to the government’s data collection ability. But analysts think otherwise.

U.S. House of Representatives heading toward a vote. The House on Wednesday night stateside cleared a procedural hurdle required before the vote could begin on a bill that would end the government shutdown. Voting is expected to happen as of publication time.

[PRO] This U.S. mining stock is a top play: CIO. U.K. fund Blue Whale Capital’s Stephen Yiu said macroeconomic concerns, such as the U.S. fiscal deficit and the weakness of the dollar, could support the stock.

Why private equity is stuck with ‘zombie companies’ it can’t sell

Private equity firms are facing a new reality: a growing crop of companies that can neither thrive nor die, lingering in portfolios like the undead.

These so-called “zombie companies” refer to businesses that aren’t growing, barely generate enough cash to service debt and are unable to attract buyers even at a discount. They are usually trapped on a fund’s balance sheet beyond its expected holding period.

— Lee Ying Shan