Highlights for the morning: the S&P 500's record AI rally, Circle's fall and Altman's new startup

The main US S&P 500 index ended trading above 6,400 points for the first time, with tech leaders and artificial intelligence-related companies largely responsible for the gains. Stablecoin issuer USDC Circle lost more than 5% in the post-market after it announced it was selling 10 million shares after rising 425% since its IPO, despite strong earnings and USDC's 90% year-to-date growth. Meanwhile, OpenAI CEO Sam Altman is launching Merge Labs, a brain-computer interface startup that could be a competitor to Elon Musk's Neuralink. These and other topics are covered in our review of key events for the morning of August 13.

The S&P 500 closed above the 6,400-point mark for the first time on Tuesday, extending gains that began in October 2022, Yahoo Finance reports. Shares of large technology companies were the drivers, with Meta and Palantir rising more than 2% to record highs. According to DataTrek, the top 20 companies in the index added an average of 40.6% after the market downturn, notably outpacing the growth of the entire index (27.9%), while the other 480 stocks dragged it down on average.

Almost all growth leaders - Nvidia, Microsoft, Apple, Amazon, Alphabet, Meta, Broadcom, Tesla, JPMorgan, Netflix, Oracle and Palantir - are related to the topic of artificial intelligence. Analysts note that companies using breakthrough technologies like generative AI are driving the market dynamics, and the growth of the industry sector is largely a continuation of the AI trend.

According to Citi, the market is at an early stage of AI infrastructure development. In the long term, the main source of revenue will be companies that implement AI to improve margins and productivity.

Circle shares fell more than 5% in extended trading on Tuesday, August 12, after announcing the sale of 10 million shares - 2 million new shares and 8 million from existing shareholders. It came shortly after the company's first report since its IPO showed revenue of $658 million in the second quarter, which exceeded analysts' expectations.

Circle CEO Jeremy Allaire noted that their USDC stablecoin was the fastest-growing among large-scale stablecoins for the year, with volume in circulation up 90% to $61.3 billion and increasing another 6.4% to $65.2 billion by Aug. 10. The company also announced the launch of a new blockchain network, ARC, in the second half of the year to simplify payments between institutional clients.

Circle's main income comes from interest payments on short-term Treasury bonds backing the USDC. Aller emphasized that even in the case of a Fed rate cut, the growth in the volume of stablecoins will compensate for the fall in yields.

AI cloud services provider CoreWeave reported revenue of $1.21 billion in the second quarter, beating estimates of $1.08 billion, and its order book grew to $30.1 billion (as of the end of June), Reuters reports. However, the net loss was $290.5 million against expectations of $190.6 million, causing the stock to fall 10% in the post-market. The company's expenses nearly quadrupled year-over-year to $1.19 billion amid accelerated business scaling.

CEO Michael Intrator said the key issue is access to strong power capacity to support infrastructure to meet customer requirements. CoreWeave is pushing to benefit from a $9 billion deal with miner Core Scientific that will provide 1.3 GW of contracted capacity, while Core Scientific's largest shareholder has said it intends to vote against the agreement.

Analysts noted that the growth in the order book suggests demand prospects well beyond 2025, but reliance on large customers, including OpenAI, remains a risk. The company also saw an increase in demand for AI inference, especially for reasoning chain models, which require significantly more computation to improve accuracy.

Sam Altman, CEO of OpenAI, is preparing to launch Merge Labs, a new startup specializing in brain-computer interfaces, at a valuation of $850 million. According to the Financial Times, the funding may come in part from OpenAI's venture capital arm, although talks are at an early stage. Alex Blania, head of Tools for Humanity, a developer of digital ID through eye scans, may become a partner in the project.

Merge Labs will become a competitor to Elon Musk's Neuralink, which is developing implantable chips to control devices with the power of thought. Neuralink is already testing the technology on patients with severe paralysis and in June raised $600 million at a valuation of $9 billion. Both projects could radically change the interaction between humans and technology and bring closer the "singularity" - the merger of humans and AI.

Altman wrote about the concept of "The Merge" back in 2017, predicting that humans would be able to design their own "descendants." Relations between him and Musk have deteriorated since the latter's departure from OpenAI in 2018, and the two exchanged harsh comments at X again this week. There has been no official announcement of Merge Labs yet.

- Japan's broad Topix index was up 0.75 percent.

- The benchmark Nikkei 225 was adding 1.3 percent.

- In South Korea, the Kospi index was up 0.9 percent and the Kosdaq small-company index was up 0.7 percent.

- Australia's S&P/ASX 200 was falling 0.45 percent.

- Futures on the S&P 500 were down 0.4%, the Nasdaq 100 was down 0.05%, and Dow Jones Industrial Average futures were up slightly by about 0.02%.

This article was AI-translated and verified by a human editor