Finance

Tech Titans Propel Nasdaq and S&P 500 Higher: Will Small-Cap Stocks Catch Up?

Tech stocks propelled the Nasdaq and S&P 500 higher, while small-caps lagged and the Dow underperformed on Monday.

byAndres Castro

November 3, 2025, 8:56 PM

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Executive Summary

The stock market showed mixed breadth on Monday, with the Nasdaq and S&P 500 closing higher while small-cap stocks and the Dow Jones Industrial Average underperformed, though Amazon and Nvidia gains mitigated deeper losses for the Dow.

The technology sector was a significant driver of market activity, with Amazon rallying on a $38 billion cloud deal with OpenAI and Nvidia jumping due to AI chip deals and analyst upgrades, underscoring continued investment in the AI megatrend.

Key corporate news included ongoing investor focus on Tesla CEO Elon Musk’s compensation package and Palantir Technologies reporting earnings that topped analyst estimates, despite a subsequent decline in its stock.

The Story So Far

The stock market’s mixed performance, characterized by strength in large-cap technology stocks and weakness in other areas, is primarily driven by the ongoing “AI megatrend” and substantial investments by major tech companies like Amazon and Nvidia in artificial intelligence initiatives, leading to significant deals and analyst upgrades. Concurrently, specific corporate developments, including the continued focus on Tesla CEO Elon Musk’s compensation package and Palantir Technologies’ recent earnings report, are also influencing investor sentiment and individual stock movements.

Why This Matters

Monday’s market activity signals a bifurcated environment where large-cap technology stocks, particularly those tied to the artificial intelligence megatrend, are driving overall market gains, while smaller companies and some traditional blue-chips lag. This concentration of growth in the tech sector suggests that AI will continue to be a primary determinant of market direction, though specific corporate news, such as Elon Musk’s pay deal or Palantir’s earnings, can still significantly influence individual stock performance.

Who Thinks What?

The broader stock market exhibited mixed breadth, with large-cap technology stocks driving gains for the Nasdaq and S&P 500, while small-cap companies and some Dow components underperformed.

Major technology companies like Amazon and Nvidia are leading market activity and driving gains, fueled by significant AI cloud deals and analyst price-target increases, signaling continued strong investment in the AI megatrend.

Investors are closely focused on specific corporate news, particularly the ongoing discussion surrounding Tesla CEO Elon Musk’s compensation package and Palantir Technologies’ stock decline despite reporting strong earnings.

The stock market displayed mixed breadth on Monday, with the Nasdaq composite and S&P 500 closing higher while small-cap stocks lagged. The Dow Jones Industrial Average underperformed, though gains from major technology companies Amazon and Nvidia helped prevent the blue-chip index from reaching session lows. Corporate news also drew investor attention, particularly an ongoing focus on Tesla CEO Elon Musk’s pay deal and Palantir Technologies’ latest earnings report.

Market Performance Overview

On Monday, the Nasdaq composite and the S&P 500 both recorded gains, indicating strength in broader market indices. However, small-cap companies experienced a downturn, contributing to the mixed market sentiment. The Dow industrials also saw an underperformance, with Merck and Nike identified among the losing issues that weighed on the index.

Despite the Dow’s overall struggle, strong performances from tech giants Amazon and Nvidia provided crucial support. Their upward movement helped mitigate deeper losses for the index, preventing it from finishing at its lowest points of the session.

Tech Sector Drives Gains

The technology sector continued to be a significant driver of market activity. Amazon stock rallied to new record highs following news of a substantial $38 billion cloud deal with OpenAI. Nvidia also saw a notable jump, propelled by analyst price-target increases and new artificial intelligence (AI) chip deals.

This trend underscores a broader signal from major tech companies, including Meta, Google, Microsoft, and Apple, indicating sustained investment in the AI megatrend. Additionally, IREN and Cipher Mining experienced surges in their stock values, attributed to new AI cloud deals with Microsoft and Amazon Web Services, respectively.

Corporate News in Focus

Beyond the broader market movements, several individual corporate developments captured investor interest. The compensation package for Tesla CEO Elon Musk remained a key point of discussion among shareholders and analysts.

Palantir Technologies also made headlines following its latest earnings report. The company announced results that topped analyst estimates, driven by growth in its U.S. government and commercial sales segments. Despite the positive earnings, Palantir’s stock experienced a decline in Monday’s trading.

Key Market Takeaways

Monday’s trading session highlighted a bifurcated market, with resilience in large-cap technology stocks contrasting with weakness in smaller companies and some Dow components. The continued enthusiasm for artificial intelligence initiatives and significant corporate deals in the tech sector played a crucial role in shaping market dynamics, while specific company news for Tesla and Palantir also influenced investor sentiment.