Wall Street erases AI sell-off in one session

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AI stocks rebound, and Wall Street nearly returns to where it was before last week’s sell-off – WTOP News wtop.com

Wall Street needed one session to change its mind about artificial intelligence. The S&P 500 rose 1.3 percent on Wednesday, closing at 7,619.38 — within 2.6 percent of the all-time high it set last month and close to recovering the whole of last week's AI-driven sell-off. The Nasdaq composite gained 1.6 percent, the most of the major indexes; the Dow added 254 points.

The rebound came a day after a hotter-than-expected inflation reading pushed bond yields up and hardened expectations of Federal Reserve rate hikes. Consumer prices argued for tighter money; AI asset prices recovered anyway. CoreWeave, which rents out AI chips over the cloud and has become the industry's test case for whether anyone in it can pay their own bills, leapt 24.7 percent after reporting a smaller summer loss than analysts expected and raising its revenue forecast. Chief executive Michael Intrator said the company has roughly 9 billion dollars in customer prepayments and deposits due over the next three months, and some analysts said CoreWeave is moving toward self-funding. The rally is measured against two worries: higher rates in the bond market making the industry's borrowing more expensive, and last week's Democratic sweep of the midterms, which has raised concerns that statehouses will restrict construction of additional AI data centers.

The rest of the market followed. Micron, which sells the memory data centers consume, rallied 11.9 percent; Broadcom added 4 percent; Nvidia climbed 2.9 percent — a stock that had been falling earlier in the week for reasons of its own, its board having opened an investigation into chief executive Jensen Huang. Oil recovered, with Brent crude up 1.4 percent at 92.76 dollars, and United Airlines lost 1.8 percent. Homebuilders kept falling — D.R. Horton sank 1.5 percent and PulteGroup 0.8 percent — since higher yields mean higher mortgage rates.

The day's largest single gain went to Fossil Group, a seller of watches and handbags, up 26.7 percent after a stronger quarterly profit than expected. The bond market, where the cost of the industry's borrowing gets set, was closed for Veterans Day.