NEW YORK (AP) — A rebound in stocks in the artificial intelligence The industry lifts the US market on Wednesday.
The S&P 500 rose 1.3% and was on track for a third win in four days Since its erasure last week on concerns about a potential slowdown for AI-related businesses. The Nasdaq Composite Index rose 1.9%, but non-AI stocks didn’t fare as well. The Dow Jones Industrial Average was up 57 points, or 0.1%, as of 11:45 a.m. Eastern Time.
On Wall Street, one of the stocks at the center of the AI industry’s recent frenzied swings has led the way. CoreWeave, which rents access to AI chips to its customers via the cloud, jumped 25% after reporting a loss for the latest quarter that was smaller than analysts expected.
He also made announcements that could ease some of the concerns weighing on him and the industry as a whole. On the one hand, there are concerns about how CoreWeave and other companies will handle higher interest rates in the bond marketwhich makes borrowing money more expensive.
CoreWeave CEO Michael Intrator said his company has about $9 billion in prepayments and customer deposits expected over the next three months, as well as other sources of liquidity to help pay its bills. Some analysts have said the company is moving toward being able to self-finance its business.
Concerns are also growing about a potential industry-wide slowdown, given long-standing concerns about whether AI will produce enough profit and productivity to make the costly investments worth it. These concerns have reached an even higher level after the Democrats’ resounding victories in last week’s elections. United States midterm elections. The concern is that Democratic control of states across the country could lead to restrictions on the construction of new AI data centers and on the industry in general.
But CoreWeave suggested the strength continues, at least for now, and raised its forecast for how much revenue it expects to make this year. This figure was higher than analysts expected.
Of course, many challenges remain for CoreWeave and the AI industry in general. But CoreWeave’s report nonetheless helped the sector’s stocks recover some of their recent steep losses.
Micron Technology, which sells computer memory, rose 13.4%. Broadcom added 6.6%. GE Vernova, which helps power AI data centers, rose 3.1%.
Even Nvidia climbed 3.8%.
The chip company that quickly became the face of the AI boom has recently tanked for reasons that have nothing to do with the rest of the industry. Its board of directors is investigating its CEO, Jensen Huang, after he admitted to having a relationship with a businesswoman which allegedly provided intelligence and advanced chips to China.
Outside of technology, Fossil Group climbed 26.9% after the seller of watches, handbags and other products reported profit for the latest quarter that was higher than analysts expected. It also raised its revenue forecast this year.
Trading elsewhere on Wall Street was mixed, however, and slightly more S&P 500 stocks fell than rose.
United Airlines lost 1.6% as shares overall felt pressure from rising oil prices, which recouped some of their losses from earlier in the week.
The price of a barrel of Brent increased by 2.9% to $94.10. It has been near the middle of its range of $72 to $120 since the war with Iran sent oil prices soaring earlier this year.
Rising oil prices tend to push up yields in the bond market, but the U.S. bond market is closed for the day on Veterans Day.
Yields jumped on the bond market the day before following a worse than expected inflation reading in the United States. This discouraging report has raised expectations of further interest rate hikes by the Federal Reserve.
Higher yields mean higher mortgage rates, and real estate companies continued to fall on Wednesday. Homebuilders PulteGroup fell 2% and DR Horton fell 1.9%.
In foreign stock markets, indices rose in much of Europe and Asia.
South Korea’s Kospi jumped 2.6%, one of the world’s biggest moves, while Hong Kong’s Hang Seng was an outlier after falling 1%.
Stocks rose 0.5% in Shanghai as China’s biggest online shopping festival, Singles’ Day, kicked off on Wednesday. Its sales data will offer a measure of the strength of spending in the world’s second-largest economy.
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AP writers Elaine Lai and Michelle Chapman contributed to this report.
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