The S&P 500 and the tech-heavy Nasdaq climbed on Wednesday after neocloud firm CoreWeave’s strong earnings calmed investor jitters about bloated AI expenditure.
CoreWeave’s shares jumped 12.7% after the battered company said it would become profitable in the first half of 2028, on an adjusted basis, as it sought to reassure investors that strong demand and customer commitments could support its debt-fuelled expansion.
“CoreWeave was emblematic of the shift from viewing all AI investments as good investments to taking a more sober look at the returns on the billions of dollars being spent on AI. The earnings report helped ease some of those concerns,” said Steve Sosnick, chief market analyst at Interactive Brokers.
The results boosted sentiment across AI infrastructure stocks, with Nebius Group and Applied Digital rising 12.5% and 5.2%, respectively.
Nvidia edged 2.4% higher after shedding about US$430 billion in the last two sessions as questions about CEO Jensen Huang’s relationship with a businesswoman alleged to be a Chinese spy roiled markets.
The Philadelphia SE Semiconductor index jumped 3% to a one-week high, with Marvell Technology and Micron up 5.5% and 6.8%, respectively.
Data storage firms Seagate Technology and Western Digital also traded higher.
Equities whipsawed this week, with concerns over slower data centre deployment, higher interest rates and Nvidia’s troubles pitted against the appetite to buy the dip.
Investors bought equities during last week’s selloff, with all net inflows coming through ETFs and institutional clients leading the purchases, Bank of America Global Research analysts said in a note.
At 09.49 am ET, the Dow Jones Industrial Average fell 73.82 points, or 0.13%, to 52,162.06, the S&P 500 rose 57.14 points, or 0.76%, to 7,578.07, and the Nasdaq Composite gained 288.47 points, or 1.16%, to 25,354.34.
Six of the 11 major S&P 500 sectors were in positive territory, with tech and energy leading gains.
The CBOE Volatility Index, Wall Street’s fear gauge, fell for the fourth straight session and was at 18.48.
Investors also examined the terms set by Anthropic on Tuesday for its blockbuster initial public offering. The Claude chatbot creator is aiming for a valuation of up to US$1.4 trillion in the share sale.
Rate fears linger
Hotter-than-expected inflation data on Tuesday reinforced expectations the US Federal Reserve would raise interest rates next month.
The central bank should consider raising borrowing costs by 50 basis points if October inflation worsened, Fed governor Christopher Waller had said before the CPI report, adding that a tamer approach risked hurting the Fed’s credibility.
Traders see a hike next month as a certainty, with an 11.5% chance of a half-percentage-point increase, according to the CME FedWatch tool.
Meanwhile, oil prices climbed 1.8% following the previous session’s two-month lows, after Iran’s security chief said Tehran would not allow enriched nuclear material to leave the country.
The US bond market is shut on Wednesday for Veterans Day.
Advancing issues outnumbered decliners by a 1.01-to-1 ratio on the NYSE and by a 1.57-to-1 ratio on the Nasdaq.
The S&P 500 posted 8 new 52-week highs and no new lows, while the Nasdaq Composite recorded 32 new highs and 51 new lows.
