US stocks: S&P, Nasdaq end over 1% higher as AI-fueled optimism weighs

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The S&P 500 and the tech-heavy Nasdaq rose more than 1% on Wednesday after strong earnings from neocloud company CoreWeave eased concerns about excessive spending on artificial intelligence infrastructure. Nvidia also recovered some ground following a sharp two-session sell-off.

The S&P 500 gained 96.91 points, or 1.29%, to end at 7,617.84 points, while the Nasdaq Composite gained 398.70 points, or 1.59%, to 25,464.57. The Dow Jones Industrial Average rose 245.03 points, or 0.47%, to 52,476.92.

Battered CoreWeave shares surged more than 20% to the highest intraday level in nearly two weeks. The company said it would become profitable in the first half of 2028 on an adjusted basis, seeking to reassure investors that strong demand and customer commitments could support its debt-fueled expansion.

The results lifted other AI infrastructure stocks, with Nebius Group climbing 17.4% and Applied Digital gaining 8.6%.

Nvidia rose 3.8% after losing about $430 billion in market value over the previous two sessions. Its shares had come under pressure amid reports concerning CEO Jensen Huang’s relationship with a businesswoman alleged to have ties to Chinese intelligence.

The Philadelphia Semiconductor Index jumped 7% to a one-week high. Marvell Technology surged 12.2%, while Micron Technology gained 13.3%.

Equity markets have swung sharply this week as concerns about slower data-centre development, higher interest rates and uncertainty surrounding Nvidia compete with investors’ appetite to buy the dip.

Investors purchased equities during last week’s sell-off, with all net inflows coming through exchange-traded funds and institutional clients leading the buying, Bank of America Global Research analysts said in a note.

“We’ve seen some of the leverage getting washed out post the midterms, which could set us up for a constructive year-end rally,” said Ron Albahary, chief investment officer at Laird Norton Wetherby.

Six of the 11 major S&P 500 sectors traded higher, led by technology and energy.

The CBOE Volatility Index, widely known as Wall Street’s fear gauge, declined for a fourth consecutive session to 17.7.

Investors also assessed the terms of Anthropic’s blockbuster initial public offering. The Claude chatbot developer is seeking a valuation of as much as $1.4 trillion.

“There’s a lot of optimistic expectations related to Anthropic’s business … any disappointment related to earnings growth, which has been outsized, could cause a selloff within the AI trade itself,” Albahary said.

Rate concerns persist

Hotter-than-expected inflation data released on Tuesday strengthened expectations that the Federal Reserve would raise interest rates next month. Traders now fully price in a December increase, according to CME FedWatch.

Before the CPI report, Fed Governor Christopher Waller said policymakers should consider raising rates by 50 basis points if October inflation accelerated. He warned that a smaller move could damage the central bank’s inflation-fighting credibility.

Oil prices rose 2.8% after Iran’s security chief said Tehran would not allow enriched nuclear material to leave the country.

The US bond market was closed on Wednesday for Veterans Day.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)

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