S&P 500 gains 1.3% as CoreWeave sparks AI chip rebound

The spark: CoreWeave, which rents Nvidia-powered computing to AI companies, jumped 24.7% after reporting third-quarter revenue of $3.66 billion on Tuesday evening, up 168% from a year earlier. Reuters said it was the stock's biggest one-day percentage gain in more than three months, and that the company told investors it expects to turn profitable on an adjusted basis in the first half of 2028. CEO Michael Intrator also said CoreWeave "will not use the unsecured debt market to fund" its business, Kiplinger reported, a worry for investors after a 32% slide in the stock this year.

Chips and hardware led: The Philadelphia Semiconductor index jumped 5.7% to its highest close since Nov. 3, and every stock in the index rose, Reuters said. Micron rose 11.9% to $811.30, Dell 11.8% to $373.68 and Seagate 10.0% to $551.72, the S&P 500's three best performers, according to Investing.com. Investing.com said Micron also got a lift from Anthropic's updated IPO filing, which lists Micron among companies buying shares, about $1 billion in its case. Among other AI infrastructure names, Nebius rose 15.4% and Applied Digital 7.4%.

Nvidia steadied: Nvidia gained 2.9% to $173.73 after losing about $430 billion in market value over the previous two sessions, Reuters said, as investors weighed its board's investigation of CEO Jensen Huang. The gain came despite a rare downgrade from Baird, to neutral from outperform, citing uncertainty about data center forecasts and "around CEO tenure," Kiplinger reported.

Not everything rose: Microsoft fell 2.3% to $521.13, Amazon 1.7% and McDonald's 2.6%, according to Investing.com. Costco rose about 2% after announcing a $30-a-share special dividend, Kiplinger said. The CBOE Volatility Index, Wall Street's fear gauge, fell for a fourth straight session to 17.49, Reuters said.

Timeline of a choppy week: After the Nov. 3 midterms, AI and chip stocks sold off on worries about a Democratic-controlled Congress and slowing AI demand; the volatility index hit its highest in more than seven months last week, Reuters said. On Monday, Nov. 9, the S&P 500 rose 2.3%, its best day since April. On Tuesday, stocks fell after a hotter-than-expected October inflation report raised odds of a December Federal Reserve rate hike. On Wednesday, CoreWeave's results sent the AI trade higher again.

What's still unknown: whether the rebound lasts when bond markets reopen Thursday after the Veterans Day closure, and how stocks react if rates keep rising. Traders now fully price in a Fed rate hike of at least a quarter point in December, with about a 10% chance of a half-point move, according to CME FedWatch data cited by Reuters. Nvidia's board review of Huang is also unresolved.

Sourcing: Reuters' market close report (as published by The Straits Times), AP, Kiplinger, Investing.com's closing summary and Dow Jones Market Data (via Morningstar). Index figures are preliminary closing values. Hero is a 2023 file photo of the New York Stock Exchange; body photo is a 2023 file photo of a Micron plant. US bond markets were closed for Veterans Day, so there were no new Treasury yield readings Wednesday.