The Dow Jones Industrial Average rose on Thursday as concerns around tech companies overspending on artificial intelligence led investors to rotate out of the trade and seek value elsewhere. Traders also digested U.S. data that pointed to persistent inflation.
The 30-stock index leaped 556.21 points, or 1.1%, to 52,177.69
The S&P 500 index was up 25.12 points to 7,744.06
The tech-heavy NASDAQ added 20.16 points to 27,713.10. Seagate Technology and Western Digital added to their declines this week, along with shares of SK Hynix, which drove a rout in South Korea’s Kospi index overnight.
Traders were becoming concerned about a potential memory chip glut as South Korea faces increasing competition from China. Tesla CEO Elon Musk discussed the matter in a post on X, saying that “China will be making a LOT of RAM in 2028.”
Compounding worries in the AI space, sources told the media that Anthropic’s revenue grew to $16.8 billion in the third quarter, with some traders concerned the AI giant’s top line might not be growing fast enough to justify the lofty gains in chipmakers.
However, other stocks in the AI trade recovered. CoreWeave shares gained almost 6%, reversing course from the prior day’s losses. The stock tumbled more than 15% in the previous session as investors grew fearful that the company was borrowing too much for its AI build-out.
CoreWeave corporate bond yields also surged. Additionally, Micron Technology rebounded from earlier losses to gain nearly 2%.
Prices for the 10-year Treasury climbed, lowering yields to 5.08% from Wednesday’s 5.24%. Treasury prices and yields move in opposite directions.
Oil prices gained $2.48 to $97.57 U.S. a barrel.
Gold prices popped $83.20 to $4,191.10 U.S. an ounce.
