Nasdaq continues to be powered by AI even as Dow Jones falls over 200 points

Benchmark indices on Wall Street had a mixed start to the new week and the month of November, as a slew of large AI and M&A deals overshadowed concerns surrounding the economy.

The Dow Jones fell 230 points, while at one point the index was down over 400 points. The S&P 500 trimmed gains of as much as 0.6% to end 0.2% higher, while the Nasdaq outperformed, closing 0.5% higher.

Gains on the Nasdaq were led by Amazon, which announced a mega $38 billion deal with OpenAI. The stock gained 4% to end at a record high, taking the two-day advance to 14%, the best two-day stretch since November 2022.

Gains were also aided by Nvidia, which added another 2% to its tally after Microsoft announced that it has secured a license from the US Commerce Department to supply Nvidia's chips to power its data centers in the UAE.

In one of Wall Street's largest deals in 2025, Kimberly-Clark announced that it will be acquiring Tylenol-maker Kenvue in a $48.7 billion transaction, which will be a mix of cash and stock. The deal will bring brands such as Tylenol, Band-Aid, and Huggies under one roof. The transaction is likely to close by the second half of 2026. Kenvue shares surged 12%, while Kimberly-Clark's stock fell over 14%.

These large deals and tech outperformance overshadowed two concerns. One, the market breadth continues to remain adverse as more than 300 stocks on the S&P 500 ended lower, while the US manufacturing activity fell for the eighth straight month.

The ISM index of manufacturing for October fell to 48.7, and a reading below 50 indicates contraction. The ISM employment gauge also shrank for the ninth month running.

Shares of Palantir surged as much as 7% in extended trading, only to pare all of those gains and trade with losses after its third quarter results beat expectations. The company also raised its guidance for the fourth quarter and the full-year. Shares of the software platform manufacturer for government and private enterprises fell as they have already surged 175% so far in 2025. As of Friday's close, the stock traded at a one-year forward price-to-sales multiple of 85x, making it the most expensive stock on the S&P 500.

Later today, stocks like AMD, Uber and Pfizer report results, followed by the private JOLTS job openings data.