(Updates to 2:04 p.m. EDT)

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AMD soars after OpenAI deal

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Tesla up as company teases Tuesday event

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Crypto companies gain as bitcoin breaches $125k

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Indexes: S&P 500 up 0.49%, Nasdaq up 0.82%, Dow down

0.06%,

By Stephen Culp

NEW YORK, Oct 6 (Reuters) - Wall Street stocks mostly

advanced on Monday, as artificial intelligence-related

dealmaking boosted investor sentiment even as the U.S.

government shutdown extended through its sixth day.

The Nasdaq and the S&P 500 were on course to reach record

closing highs, while the blue-chip Dow lingered barely in the

red.

Chips took the lead after AMD said it would supply AI

chips to OpenAI in a deal that could generate tens of billions

of dollars in yearly revenue and would allow the ChatGPT creator

to buy a stake of up to a 10% in the chipmaker.

AMD surged 26.1%, while the broader Philadelphia Semiconductor

index rose 3.9%.

"The economic backdrop, at least until the government shut

down, has been fairly solid," said Tim Ghriskey, senior

portfolio strategist at Ingalls & Snyder in New York. "Earnings

season is coming up and there are a lot of favorable themes, so

the path of least resistance is higher."

The federal government remained shuttered for the sixth day as

lawmakers idled in a partisan impasse. The shutdown has

postponed the release of key economic indicators, forcing

investors to rely on secondary, non-government data to gauge the

timing and extent of Federal Reserve interest rate cuts.

Monetary policymakers have cautioned against rushing to lower

the Federal funds target rate as inflation remains high, while

others believe signs of softness in the labor market merit rate

cuts.

Financial markets have priced in an all-but-certain 94.6% chance

of a 25 basis point interest rate reduction at the conclusion of

the Fed's October meeting.

Without new U.S. government data this week, market

participants are monitoring reports on outstanding consumer

credit, mortgage demand and the University of Michigan's

preliminary take on October consumer sentiment.

The Dow Jones Industrial Average fell 28.56 points, or

0.06%, to 46,729.72, the S&P 500 gained 32.63 points, or

0.49%, to 6,748.42 and the Nasdaq Composite rose 186.15

points, or 0.82%, to 22,966.16.

Among the 11 major sectors of the S&P 500, tech

and consumer discretionary led the gainers, while

consumer staples suffered the steepest percentage

decline.

Next week, investors will find catalysts as third-quarter

earnings season gets underway, with results from large U.S.

banks launching the festivities.

Analysts estimate aggregate year-on-year S&P 500 earnings growth

of 8.8% for the July-to-September period, up 0.8 percentage

points from projections at the beginning of the quarter,

according to LSEG data.

Tesla advanced 4.4% after the electric carmaker teased

an event scheduled for Tuesday on social media platform X over

the weekend.

TD Cowen cut its Starbucks ( SBUX ) price target, citing a

weakening labor market affecting Generation Z, sending the

coffee chain's shares down 4.2%.

Bitcoin breached the $125,000 mark on Sunday, sending

crypto-related firms Coinbase, Strategy, Riot

Platforms ( RIOT ) and MARA Holdings ( MARA ) all gained ground.

Regional bank Comerica ( CMA ) gained 14.3% after Fifth Third

said it will buy the company in an all-stock deal

valued at $10.9 billion.

Verizon shares dipped 4.8% after the telecommunications

company named former PayPal boss Dan Schulman as its

new chief executive officer.

Advancing issues outnumbered decliners by a 1.24-to-1 ratio

on the NYSE. There were 547 new highs and 67 new lows on the

NYSE.

On the Nasdaq, 2,731 stocks rose and 1,885 fell as advancers

outnumbered decliners by a 1.45-to-1 ratio.

The S&P 500 posted 43 new 52-week highs and eight new lows while

the Nasdaq Composite recorded 172 new highs and 48 new lows.