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Wall Street Bounces Back Amid Job Reports and AI Spending Surges

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Wall Street Market Trading Update

NEW YORK, NY – Wall Street experienced a strong rally on Monday, recovering from last week’s disappointing performance, which was affected by a weak jobs report. All three major indices—the S&P 500, Nasdaq, and Dow Jones Industrial Average—gained over 1% in afternoon trading.

The rally was broad-based, with 10 out of the 11 sectors of the S&P 500 finishing in the green. However, the energy sector lagged, primarily due to declines in shares of ExxonMobil and Chevron, which are the largest companies in that sector.

In the midst of this market upturn, the CNBC Investing Club with Jim Cramer executed its third sale of shares in Abbott Laboratories since July 21 as a strategic move to capitalize on this positive trading day. Despite stable market conditions, Jim Cramer hinted that any proceeds from recent sales would ideally be reinvested in Starbucks, especially after the coffee giant’s earnings release last week.

On the political front, President Donald Trump continued to assert that recent nonfarm payroll data and revisions were manipulated, echoing sentiments from last Friday when he dismissed the head of the Bureau of Labor Statistics. In an interview on CNBC, Kevin Hassett, Director of the National Economic Council, acknowledged the long-standing challenges in jobs data, while also alluding to resistance from various government entities towards Trump’s administration.

Jim Cramer emphasized that the weak jobs report could indicate a faltering economy, making it more likely for the Federal Reserve to cut interest rates at its upcoming meeting in September. He suggested that if such a cut occurs, it would potentially lead to positive outcomes for investors.

Meanwhile, Morgan Stanley analysts reported that the generative AI sector is set for significant growth, forecasting a 56% increase in capital expenditures among the 11 largest tech companies—including Meta Platforms, Microsoft, and Amazon—into 2025. This surge in spending is expected to enhance infrastructure for cloud computing and AI-related services.

The report highlighted that AI investments from industry leaders are likely to contribute to expanding services and device sales, particularly for Apple, which is ramping up its AI spending in response to past shortcomings in this area.

As the trading day closed, investors turned their attention to earnings reports coming later in the week from key companies, including Coterra Energy and DuPont.

This week is expected to provide only a few significant economic updates with the Institute for Supply Management releasing its monthly services sector report on Tuesday, potentially shaping market expectations.