What’s News in Markets: AI Deals, Trump on Pharma, Banks Split

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Francesca Fontana (0:18)

Hey, listeners. It's Saturday, October 18th. I'm Francesca Fontana for The Wall Street Journal, and this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. It was an up and down week for the markets. On Monday, stocks were regaining ground thanks to comments from the Trump administration that eased investors' fears of a revived trade war with China. And this optimism in the market was further stoked by strong quarterly reports from banks that kicked off earnings season. The big picture takeaway there? America's biggest bankers said that the economy is solid, the US consumer is healthy, and they haven't seen much change in recent months. And that sent investors cheering on Wednesday. Then Thursday came along, and the mood soured a bit on worries about the health of regional banks. So how did it all shake out? Well, on a weekly basis, the Dow ended 1.6% higher, the S&P gained 1.7%, and the NASDAQ rose 2.1%.

First up, let's go through some of the big AI news from this week. Let's talk about the chipmaker Broadcom, which got a boost from its new multi-billion dollar deal with OpenAI, the startup behind ChatGBT. The two are working together to develop and deploy custom AI chips and computing systems as part of this massive deal. And we've talked on this podcast recently about OpenAI's big announcements with NVIDIA, advanced micro devices, and now Broadcom. This one data point I found really highlights just how massive these deals are. Apparently, the total scale of computing capacity that OpenAI's agreed to buy is now 26 gigawatts. That's enough power to meet the summer electricity needs of New York City more than two times over. Broadcom shares jumped 9.9% on Monday and held on to most of those gains throughout the week. And here's another ChatGPT headline from this week. Walmart will soon be selling its products right within the AI chatbot. The retail giant's partnership with OpenAI will let US-based users purchase nearly everything that they could get from the Walmart website, except for fresh food. And Walmart shares ended up gaining 5% on Tuesday and on a weekly basis rose 5.8%.

Next up, let's look at some health-related stocks making moves this week. Hims and Hers shares jumped 16% on Wednesday on the news that the telehealth company will now offer menopause and perimenopause care. Hims and Hers said it expects the new specialty to help Hers, its women's health unit, to surpass $1 billion in annual revenue next year. Now let's jump to Friday's session. Pharma stocks Novo Nordisk and Eli Lilly really needed a shot in the arm, after comments from President Trump the day before sent their shares falling. While speaking in the Oval Office, Trump said that the out-of-pocket cost of Ozempic could fall to $150. For reference, Ozempic currently has a US list price of nearly $1,000 a month. Now remember, Novo Nordisk makes Ozempic as well as another weight loss drug, Wigovie, and Eli Lilly sells similar drugs Munjaro and Zepbond. Now these drugs' costs are still apparently being negotiated, so this is just talk, so to speak. But the pricing concerns were enough to send US-traded shares of Novo Nordisk down 3.1% on Friday, losing 4.5% for the week. And for Eli Lilly, the stock fell 2% on Friday, and on the week, lost 3.7%. Last but not least, let's swing back to America's big banks. The six largest banks said they raked in almost $41 billion in profit in the past three months. That's a 19% increase from last year. So how did the big six finish the week after all of the market's ups and downs? Well, in the number one spot was Wells Fargo, which gained 7.3%. Three more of the stocks managed to end the week in the green. Bank of America rose 5.4%, Morgan Stanley rose 4.5%, and Citigroup added 3.3%. And two of them ended with losses for the week. Goldman Sachs fell 1.8% and JPMorgan lost 1.1%. And now you know What's News in Markets this week. You can read about more stocks that moved on the week's news in The Score, my column in the Wall Street Journal's Exchange section. Today's show was produced by Zoe Kolkin with Deputy Editor Kristen Slee. I'm Francesca Fontana. Have a great weekend and I'll see you next Saturday.