CNBC Daily Open: Bleak news from U.S. doesn’t seem that bad for stocks

On Wednesday, the U.S. government ground to a halt. Stock markets, however, jumped — one benchmark even hit a record high.

Traders in prediction markets are betting the shutdown will last nearly two weeks. Nothing too radical, since that’s the average length it takes for the government to reopen, based on data going back to 1990 from Bank of America.

The government stoppage isn’t putting the brakes on the stock market momentum. Are investors getting too adventurous? Well, history shows the pattern is not new. The S&P 500 has risen an average of 1% the week before and after a shutdown, according to data from BofA.

Even the ADP jobs report, which missed expectations by a wide margin, did little to subdue the animal spirits. Private payrolls declined by 32,000 in September, according to ADP, compared with a 45,000 increase estimated by a Dow Jones survey of economists.

The Bureau of Labor Statistics’ official nonfarm payrolls report is now stuck in bureaucratic purgatory and hence not being released Friday. So, the U.S. Federal Reserve might place additional weight on the ADP report — though it’s not always moved in sync with the BLS numbers. Traders expect weak data would prompt the Fed to cut interest rates in October.

Shrugging off all negative news, the S&P 500 closed above the 6,700 level for the first time. Looks like, once again, the perception of what is bad news is starkly different for outside observers and the markets.

Taiwan rejects U.S. proposal to split chip production. Moreover, trade talks with the White House did not even touch on the topic, the island’s negotiator, Cheng Li-chiun, told reporters on Wednesday as she returned from the U.S.

OpenAI finalizes share sale that values it at $500 billion. Former and current employees sold their shares in a secondary sale totaling $6.6 billion. OpenAI had authorized up to $10.3 billion in shares for sale, and the lower amount is viewed internally as showcasing optimism about the company’s prospects.

Samsung and SK Hynix join OpenAI’s Stargate. The artificial intelligence company said Wednesday the partnership aims to increase the supply of advanced memory chips. Samsung and SK Hynix will ramp up their prediction of such chips, OpenAI added.

S&P 500 closes above 6,700. After rising 0.34% Wednesday, the broad-based index closed above the 6,700 level for the first time. Asia-Pacific markets traded higher Thursday. South Korea’s Kospi index jumped, buoyed by gains in Samsung and SK Hynix.

[PRO] Stocks that doubled in the third quarter. Among this group of star performers are several artificial intelligence stocks that have flown under the radar until now — but they could face downside ahead, according to LSEG consensus price targets.

Why current AI models won’t make scientific breakthroughs, according to a top tech exec

The first issue preventing products such as ChatGPT from coming up with novel ideas is that they often agree or align with the person prompting it, said Thomas Wolf, co-founder of $4.5 billion AI startup Hugging Face. Think back to if you’ve asked a chatbot something and it has responded with how interesting or great that question was.

The second is that the models underpinning chatbots are designed to “predict the most likely next token” or “word” in a sentence. However, he noted that scientists behind major breakthroughs are often contrarian and question what others are saying.

— Arjun Kharpal