Nasdaq climbs over 1% as AI-linked stocks recover ahead of key earnings
Summary
The Nasdaq Composite climbed 1.78% on Wall Street on Monday as investors returned to AI-related stocks ahead of key corporate earnings reports. CoreWeave, Nebius, Iren and major chipmakers gained after last week’s selloff, while declining oil prices added support. Investor concerns remain focused on financing the costly AI infrastructure build-out and the effects of higher interest rates.
Key Facts
- CoreWeave shares rose 3.1% after Goldman Sachs upgraded the company to buy from neutral, following a more than 25% drop the previous week linked to concerns over its $50 billion debt load.
- The Philadelphia Semiconductor Index gained 3.7%, potentially ending an eight-session losing streak that would be its longest since October 2008.
- At 11:42 a.m. ET, the S&P 500 was up 0.89% at 7,727.91 and the Dow Jones Industrial Average was up 0.18% at 52,093.44.
- Meta and Tesla were expected to report results on Wednesday, while SpaceX was scheduled to report on Tuesday.
- Brent crude futures fell 1.7% to about $108 a barrel after Donald Trump waived some sanctions on Russia.
A trader works on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York City, Monday. Tech shares were on the upswing early October 19 as investors opened the week by taking advantage of last week's pullback in the Nasdaq. Last weeks 4.5 percent drop was due to various worries surrounding the artificial intelligence buildout, including over the impact of higher interest rates on debt taken out to finance the boom. AFP-Yonhap
The tech-heavy Nasdaq Composite led Wall Street's gains on Monday as investors returned to AI-related stocks following last week's bruising selloff, while declining oil prices lent additional support ahead of key corporate earnings reports.
The benchmark S&P 500 and Nasdaq had posted their biggest weekly drop since late June on Friday, as concerns that higher interest rates could curb investments in AI infrastructure weighed on technology stocks, particularly data center operators.
The selloff reflected mounting investor unease over how the costly AI build-out will be financed, a question that has increasingly pressured companies underpinning the U.S. bull market, which recently marked its fourth anniversary.
CoreWeave, which was at the center of last week's selloff after its shares plunged more than 25 percent on worries over a $50 billion debt load, climbed 3.1 percent on Monday. Goldman Sachs upgraded the neocloud firm to "buy" from "neutral", saying the recent selloff offers a buying opportunity.
Peers Nebius and Iren gained 4.7 percent and 6.5 percent, respectively.
Chipmakers Broadcom climbed 3.2 percent and Micron jumped 5.3 percent. The Philadelphia Semiconductor Index rose 3.7 percent, putting it on course to end an eight-day losing streak, its longest run of declines since October 2008.
Amazon.com was up 5.2 percent after Morgan Stanley named the e-commerce and cloud computing firm as its "top pick".
"The main concern was CoreWeave and the potential for the yields on their bonds going up and the liquidity issues there. That certainly scared people," said Joe Saluzzi, co-head of equity trading at Themis Trading.
"Looks like this morning they've settled down, and I think the trade still seems to have legs."
Focus is now shifting to a busy week of corporate earnings, with Meta expected to beat Wall Street expectations on Wednesday. Elon Musk-led Tesla's results are also due that day, while SpaceX is scheduled to report on Tuesday.
At 11:42 a.m. ET, the Dow Jones Industrial Average rose 91.03 points, or 0.18 percent, to 52,093.44. The S&P 500 gained 68.47 points, or 0.89 percent, to 7,727.91, while the Nasdaq Composite advanced 463.92 points, or 1.78 percent, to 26,603.96.
The session coincides with the 39th anniversary of Black Monday, the 1987 crash that marked the biggest one-day decline in the history of Dow Jones Industrial Average.
Of the 11 S&P 500 constituents, five posted losses. However, consumer discretionary and technology group led the gains, up 2.8 percent and 2.2 percent, respectively.
Brent futures were last down 1.7 percent at around $108 a barrel, following U.S. President Donald Trump's decision to waive some sanctions on Russia.
Intel shares rose 5.8 percent after J.P.Morgan upgraded the stock to "neutral" from "underweight."
Cleveland-Cliffs surged 15.6 percent after the steelmaker surpassed analysts' estimate for third-quarter profit.
Declining issues outnumbered advancers by 1.11-to-1 ratio on the NYSE, while advancing issues outnumbered decliners by 1.28-to-1 ratio on the Nasdaq.
The S&P 500 posted 10 new 52-week highs and two new lows, and the Nasdaq Composite recorded 20 new highs and 242 new lows.
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