US stock market today: Dow, S&P 500 and Nasdaq rally as Nvidia’s xAI deal lifts AI stocks; here’s top stocks to watch amid Fed minutes and Powell speech

Market Overview - The U.S. stock market opened higher with the Dow Jones rising 3%, S&P 500 climbing 0.5%, and Nasdaq increasing by 0.7% [1][22][24] - Small-cap stocks on the Russell 2000 advanced by 0.6% [1][22] - Despite these gains, there is caution among traders due to ongoing economic uncertainty from the U.S. government shutdown and upcoming Federal Reserve decisions [1][10][22] Housing Market - Mortgage applications dropped 4.7% for the week ending October 3, following a 12.7% decline the previous week [6][9][22] - Purchase applications declined by 1.2% and refinance applications fell by 7.7%, attributed to higher mortgage rates near 6.43% [6][9][22] Nvidia and AI Investments - Nvidia is investing $2 billion into Elon Musk's AI venture xAI as part of a $20 billion funding round, which will help purchase Nvidia GPUs for xAI's Memphis data center [2][11][24] - Nvidia's CEO Jensen Huang noted a substantial rise in demand for AI computing over the past six months [2][11] Tesla's New Models - Tesla introduced lower-cost versions of its Model Y and Model 3 to counter slowing sales amid rising competition, with prices starting at $41,630 and $38,630 respectively [3][24] - Tesla's stock showed slight recovery after a recent sell-off due to higher-than-expected pricing on new variants [3][24] Oracle's Financial Performance - Oracle reported a loss of nearly $100 million in its latest quarter from renting Nvidia Blackwell chips for AI cloud services, generating about $900 million in rental revenue with thin gross margins of 14% [4][24] - This loss has negatively impacted Oracle's stock, which fell over 5% [4][24] Federal Reserve Insights - The Federal Reserve's September meeting minutes revealed divisions regarding future rate cuts, with policymakers showing differing views due to mixed economic data [7][17][24] - Fed Chair Jerome Powell is expected to address the community bank conference, with consumer sentiment data anticipated to decline slightly [7][24] Investor Sentiment - Overall investor sentiment is cautiously optimistic, with the S&P 500 showing resilience after a six-month bear market [18][24] - Technology stocks remain a key driver of optimism, although macroeconomic risks are acknowledged [19][24]