PiCK

Summary

  • U.S. AI-related stocks rebounded, lifting the Nasdaq and the S&P 500.
  • Buying flowed into battered semiconductor stocks such as Nvidia and Micron, as well as AI data-center names.
  • Solid employment and wage data kept rate-hike concerns alive and pushed Treasury yields higher, weighing on the stock market’s recovery.

Forecast Trend Report by Period

Nvidia rises 2.8%; Micron gains 5.15%

Strong jobs data keeps rate-hike concerns alive


U.S. artificial intelligence-related stocks rebounded a day after a broad selloff hammered the sector. Buying in semiconductor shares including Nvidia and Micron helped the Nasdaq and S&P 500 recoup part of the previous session’s losses. The Dow fell, however, and stronger-than-expected labor data kept pressure on the interest-rate outlook.

On Nov. 6, the Nasdaq Composite closed up 264.43 points, or 1.09%, at 24,579.42. The S&P 500 rose 23.13 points, or 0.31%, to 7,376.86. The Dow Jones Industrial Average fell 237.33 points, or 0.46%, to 51,285.73.

Investors who had been pricing in the possibility of tighter data-center regulation after the U.S. midterm elections returned to beaten-down technology stocks. Concerns had grown that AI infrastructure expansion could slow after Democrats retained control of Congress and Democratic candidates won in major data-center regions. Even so, expectations for the sector’s long-term growth remain intact.

Nvidia, which tumbled 9.26% a day earlier, closed up 2.81% at $186.70. Micron, which had plunged 17.46% in the previous session, rose 5.15% to $690.20. Buying returned to semiconductor stocks that had posted steep losses, fueling a rebound led by technology shares.

AI data-center company IREN jumped about 20% after posting earnings that beat market expectations and announcing new contracts. Lam Research rose 8.2% after unveiling a share buyback plan of as much as $25 billion. CoreWeave, which provides AI computing resources through the cloud, gained 6.3%.

“AI is still the core theme of this bull run,” Keith Lerner, chief investment officer at Truist Advisory Services, said. He added that the recent pullback could offer a buying opportunity for long-term investors and that he remained confident in technology stocks.

Labor data released before the opening bell eased concerns about an economic slowdown while keeping the prospect of further tightening on the table. The U.S. Labor Department said nonfarm payrolls increased by 165,000 in October from the previous month. The unemployment rate was 4.1%. Average hourly earnings in the private sector rose 0.4% from a month earlier and 3.1% from a year earlier.

With employment and wages holding firm, bets gained traction that the Federal Reserve could raise its benchmark rate in December. The yield on the 10-year U.S. Treasury note rose to 4.86% from 4.84% a day earlier, adding pressure to the stock market’s recovery.

Even with the rebound, the major indexes failed to erase their weekly losses. The Nasdaq fell 3.4% this week, while the S&P 500 lost 2.7% and the Dow slipped 0.9%. The Nasdaq has declined for four straight weeks.

Doohyun Hwang