The S&P 500 and Nasdaq Composite rose on Monday as artificial intelligence (AI)-related stocks recovered from last week’s sharp fall. Lower oil prices also supported the market ahead of several major company earnings reports due this week.
The S&P 500 and Nasdaq Composite recorded their biggest weekly declines since late June on Friday. The trading session also took place on the 39th anniversary of Black Monday, the October 1987 stock market crash when the Dow plunged 22.6%, Reuters reported. Broadcom gained 2.2%, while Micron jumped 4.3%. The Philadelphia Semiconductor Index rose 2.5% and was on track to end an eight-day losing streak, its longest series of daily declines since October 2008. Amazon.com shares gained 2.3% after Morgan Stanley named the e-commerce and cloud computing company its “top pick. CoreWeave shares were last up 0.2% on Monday after falling more than 25% the previous week, according to Reuters. Concerns about CoreWeave’s $50 billion debt load contributed to its sharp fall last week. At 9:52 a.m. Eastern Time on Monday, the Dow Jones Industrial Average was down 102.02 points, or 0.20%, at 51,900.39. The S&P 500 gained 34.27 points, or 0.45%, to 7,693.71, while the Nasdaq Composite rose 249.13 points, or 0.95%, to 26,389.16, Reuters reported. Most companies in the S&P 500 were trading lower, but the technology sector led the gains. The sector rose 1.2%, helping lift the overall index despite losses across many other stocks. Brent crude oil futures fell 1.3% to around $108 a barrel. Shares of steelmaker Cleveland-Cliffs surged 8.7% after the company reported third-quarter profit above analysts’ expectations. On the New York Stock Exchange (NYSE), declining stocks outnumbered advancing stocks by a ratio of 1.18 to 1. The S&P 500 recorded eight new 52-week highs and two new lows. The Nasdaq Composite recorded 12 new highs but 120 new lows, showing that many individual Nasdaq-listed stocks remained under pressure despite the index’s overall rise.
Investors were worried that higher interest rates could make it more expensive for companies to invest in AI infrastructure, especially data centers, Reuters reported. The move added to the recovery in technology stocks, Reuters reported.
Goldman Sachs upgraded data center company CoreWeave to “buy” from “neutral,” saying the recent fall in its share price had created a buying opportunity. Sam Stovall, chief investment strategist at CFRA Research, said the technology stock selloff last week was driven by rising interest rates and concerns surrounding CoreWeave. Intel shares gained 5.1% after JPMorgan upgraded the stock to “neutral” from “underweight. The rating change indicated a more positive view of the chipmaker’s shares, according to Reuters. On the Nasdaq, advancing stocks outnumbered declining stocks by the same ratio, according to Reuters.
The recent market selloff reflected growing concerns about how companies will pay for the expensive expansion of AI infrastructure . These concerns have put pressure on companies that have helped drive the US stock market’s bull run, which recently completed its fourth anniversary. Semiconductor stocks rose as investors returned to AI-related shares. Investors are worried about the amount of borrowing needed to support the expansion of AI infrastructure. He warned that the problems might continue, adding that investors would closely examine company earnings this week to identify businesses most at risk. Investors are preparing for results from major companies this week. The decline followed US President Donald Trump’s decision to waive some sanctions on Russia.
The Dow Jones Industrial Average fell on Monday as shares of JPMorgan Chase, Sherwin-Williams and Visa recorded small declines. Meta is expected to report earnings on Wednesday, with expectations that it will beat Wall Street estimates. Elon Musk-led Tesla is also scheduled to report on Wednesday, while SpaceX is expected to report on Tuesday.
