Wall Street: Dow Jones Hits New Record as Nasdaq Consolidates Amid AI Valuation Doubts

• Market Insights

Wall Street delivered a mixed performance this Wednesday, with the Dow Jones Industrial Average soaring to a fresh all-time high while the Nasdaq Composite dipped amid lingering concerns over AI stock valuations. Key highlights include AMD’s bullish outlook on AI data centers, Michael Burry’s bearish bets against Nvidia and Palantir, and progress toward ending the U.S. government shutdown. Meanwhile, Foxconn’s robust earnings and Chevron’s pivot to AI-powered energy projects underscore the sector’s rapid evolution. --- ### Why Is the Dow Jones Outperforming the Nasdaq?

The Dow Jones surged 0.8% to a record 48,310 points, fueled by gains in financial heavyweights like Goldman Sachs and JPMorgan. In contrast, the Nasdaq slipped 0.4% to 23,373 points as investors questioned the sustainability of AI-driven valuations. The S&P 500 held steady at 6,848 points (+0.02%). Analysts attribute the divergence to sector rotation, with money flowing into "old economy" stocks amid uncertainty over tech’s premium pricing. "The Dow’s rally reflects a flight to safety," noted a BTCC market strategist. "AI euphoria is facing a reality check."

--- ### Government Shutdown Nears Resolution: What’s Next?

A temporary funding bill to end the 43-day shutdown cleared the Senate and heads to the House for a final vote. The deal funds federal operations until January 30 but delays contentious issues like healthcare subsidies. While 800,000 furloughed workers will receive back pay, air travel disruptions and food aid delays may persist for days. President TRUMP hailed the compromise: "We’re getting the country back on track." However, Reuters reports Democrats may push for healthcare concessions in December’s budget showdown.

--- ### Michael Burry’s $176 Billion Warning on AI Infrastructure

The "Big Short" investor doubled down on his skepticism, shorting Nvidia and Palantir while predicting cloud giants like Meta and Oracle will understate $176 billion in AI-related depreciation by 2028. On social media, Burry argued: "Spending billions on Nvidia chips won’t extend hardware lifespans—it’s a ticking time bomb." His track record of doom-and-gloom calls, though, leaves some unconvinced. "Burry’s right until he’s not," quipped one trader.

--- ### AMD vs. Nvidia: Who’s Winning the AI Chip Race?

AMD shares jumped 10.5% after CEO Lisa Su projected a $1 trillion AI data-center market by 2030, with AMD targeting 60% revenue growth in the segment. The company sealed deals with OpenAI (6 gigawatts of capacity) and Oracle (50,000 chips). Meanwhile, Nvidia dipped 0.5% as SoftBank offloaded $5.8 billion in shares. Foxconn, Nvidia’s top server maker, added fuel to the fire with a 17% profit beat, citing "unstoppable" AI demand. "This is just the first wave of AI adoption," Foxconn’s chairman declared.

--- ### Commodities & Crypto: Oil Slumps, bitcoin Holds $104K

WTI crude tumbled 3.1% to $59.1/barrel amid oversupply fears, while gold rose 1% to $4,167/ounce. Bitcoin steadied near $104,000 as Circle Internet (USDC issuer) posted a 66% revenue jump. Stablecoin reserves now exceed $73.7 billion—double 2024’s levels. "Crypto is now systemic," said Fed Governor Waller, acknowledging its financial integration.

--- ### Chevron’s AI Bet: Gas-Powered Data Centers by 2027

Chevron unveiled plans for a 5,000-megawatt Texas facility to power AI data centers with natural gas. The $1.7 billion project, targeting a 2027 launch, marks Big Oil’s foray into tech infrastructure. "AI’s energy hunger is insatiable," said a Bloomberg analyst. "Chevron’s hedging its bets."

--- ### FAQ: Quick Takes on Market Moves

Market Insights

Why did AMD surge while Nvidia fell?

AMD’s bullish AI forecasts and new contracts eclipsed Nvidia’s SoftBank-related sell-off. Traders see AMD as a cheaper alternative to Nvidia’s premium-priced GPUs.

Is Michael Burry’s AI warning credible?

His math on depreciation risks is sound, but timing is uncertain. Cloud providers argue AI efficiency gains will offset costs.

When will the shutdown’s economic impact fade?

Most disruptions (e.g., air traffic, food aid) should resolve within a week—if the House approves the funding bill today.