Key Highlights

● Amazon slipped only slightly, with no company-specific news found to explain the quiet session.

● Alphabet was also little changed, while Microsoft gained and Nvidia hit a record close.

● Consumer discretionary stocks were trying to avoid a ninth straight weekly decline the same day.

Amazon barely budged on Monday, Oct. 5, sitting out a rally in AI stocks that pushed the Nasdaq to a record close, with no fresh company news to move the shares.

Flat on a busy day

Amazon (NASDAQ:AMZN) barely moved on Monday, slipping only slightly in the Dow Jones Industrial Average during the session. No company-specific news was found to explain the move.

That made the E-commerce and cloud giant something of a bystander on a day when many of its mega-cap peers were in demand. Alphabet (NASDAQ:GOOGL) was also little changed, while Microsoft (NASDAQ:MSFT) gained after an analyst upgrade and Nvidia (NASDAQ:NVDA) climbed to a record close.

For a company of Amazon's size, a quiet session is not unusual. But the contrast with the rest of big tech stood out.

The AI trade went elsewhere

Monday's rally was driven by a handful of AI leaders. Nvidia rose to a record close, with a Market Value of about $5.7 trillion. The Associated Press called the chipmaker "the single strongest force lifting the S&P 500."

Microsoft rose after Melius Research upgraded it to Buy from Hold with a $665 price target, calling it "the adult in charge" on AI security and governance. Meta Platforms (NASDAQ:META) climbed and led communication services, the top sector at midday.

Amazon, despite its large Cloud Computing business, did not share in that enthusiasm on Monday. Reports noted Amazon and Alphabet held steady while Microsoft rose.

The broader market finished higher. The Nasdaq Composite jumped 286.45 points to a record 27,477.31, and the Nasdaq-100 closed at a record 31,076.44. The S&P 500 added 51.23 points to 7,773.95, just shy of its summer record.

The Dow trailed, rising only 90.94 points to 51,267.90 after spending much of the morning lower. Health care and consumer names held it back, while Visa (NYSE:V) led the Blue-Chip index.

Yields, jobs and oil

The 10-year Treasury Yield climbed to its highest level since 2002. That came despite Friday's weak September jobs report, which showed payrolls rising by just 29,000 and cut bets on an October Federal Reserve hike to roughly one in four or less.

Inflation worries kept yields elevated. The ISM services prices-paid index hit 74.0 on Monday, the highest since July 2022.

Daniela Hathorn, senior market analyst at Capital.com, said: "growth stocks are rallying because Fed expectations have softened, while the Risk-Free Rate against which those valuations are judged remains exceptionally high."

Oil fell even as the Strait of Hormuz stayed effectively closed. Brent settled at $100.32 a barrel and US crude slid to about $89.43 after G7 nations agreed to release emergency reserves. Lower energy costs can be good news for retailers and delivery-heavy businesses.

Consumer signals

Amazon also has a large retail arm, which ties it to the health of the American shopper. Consumer discretionary stocks were trying to avoid a ninth straight weekly decline, and restaurant stocks such as Chipotle (NYSE:CMG) were weak on Monday. Nike (NYSE:NKE) fell after a Credit rating downgrade from S&P Global Ratings.

What to watch

Minutes from the Fed's September meeting are due Wednesday, Oct. 7 at 2 p.m. ET, and the Fed meets again Oct. 27 to 28. Big-bank Earnings begin Oct. 13, kicking off a season in which AI spending and cloud Demand will be in focus. For Amazon, the next clear catalyst is the company's next quarterly report.