The Nasdaq Composite advanced 1.1% on Monday, leading a modest rebound in U.S. equities as investors returned to technology and artificial intelligence-related names following last week's sharp decline. The S&P 500 added 0.4%, while the Dow Jones Industrial Average finished just below the flatline.
Last week proved challenging for the market, with the S&P 500 dropping nearly 2% and the Nasdaq falling 4.5%—both recording their steepest weekly losses since late June. The information technology sector also suffered its worst weekly performance since April 2025, as concerns mounted over the cost of financing AI infrastructure and whether future earnings growth would justify the heavy capital expenditures.
Semiconductor Stocks Lead the Recovery
Chipmakers were a key driver of Monday's rebound. Intel shares climbed about 2% after JPMorgan upgraded the stock to neutral from underweight. Advanced Micro Devices gained 1%, and Micron Technology rose 2%. The Philadelphia Semiconductor Index snapped an eight-session losing streak, during which it had fallen roughly 15.7%—its longest run of declines since October 2008.
The bounce came after a week of intense selling in tech, as investors reassessed the financial risks tied to the AI investment boom. According to Goldman Sachs, the technology sector was the most net-sold globally, with hedge funds selling a record proportion of their tech holdings.
However, the recovery was uneven. CoreWeave shares slipped about 0.44%, reversing earlier gains despite an upgrade from Goldman Sachs to buy from neutral. The cloud computing firm's stock had plunged more than 25% last week amid concerns about its roughly $50 billion debt load. Its credit default swaps also reached distressed levels, signaling unease in the corporate bond market.
AI Financing Concerns Persist
Investor anxiety was heightened by reports that Anthropic generated $16.8 billion in third-quarter revenue, up from $11.6 billion in the second quarter. While the increase was substantial, it raised questions about whether growth is keeping pace with the scale of AI infrastructure investment. Market participants are increasingly scrutinizing whether AI-related companies can generate sufficient returns on capital to justify their borrowing and spending.
The pressure on CoreWeave has also highlighted the vulnerability of AI investments in a higher-interest-rate environment. If earnings growth moderates, concerns about debt financing could leave the broader market more exposed to volatility. Other cloud computing firms, including Nebius and Iren, outperformed CoreWeave on Monday.
Oil Prices and Earnings in Focus
Energy markets added another layer of uncertainty. Attacks on shipping and energy infrastructure in the Persian Gulf, along with ongoing strikes involving Russia and Ukraine, have raised fears of prolonged supply disruptions. U.S. West Texas Intermediate crude futures settled 2.06% higher at $103.50 a barrel, while Brent crude fell 0.41% to $109.41 a barrel. Higher oil prices could stoke inflation and complicate the interest rate outlook.
Investors are also bracing for a busy week of corporate earnings. Meta Platforms and Tesla are scheduled to report on Wednesday, while SpaceX is due on Tuesday. These results could provide insight into technology spending, AI-related investment, and overall corporate profitability as the market attempts to recover from last week's losses.
This article is for informational purposes only and does not constitute financial advice.
