US equities opened higher on Wednesday, with the Nasdaq Composite climbing 1.44%, as a robust earnings report from CoreWeave helped restore confidence in artificial intelligence infrastructure spending. The S&P 500 advanced 0.84%, while the Dow Jones Industrial Average slipped 68 points.
CoreWeave's Strong Results Lift AI Infrastructure Stocks
CoreWeave, a cloud computing company, saw its shares surge more than 12% after reporting better-than-expected third-quarter revenue and raising its 2026 revenue and operating income guidance. The company also projected it would achieve adjusted profitability in the first half of 2028. This news helped alleviate concerns about the sustainability of AI infrastructure investment, which had weighed on technology stocks in recent sessions.
The positive sentiment extended to other AI infrastructure players. Nebius Group and Applied Digital gained 12.19% and 6.38%, respectively, recovering from recent pressure tied to worries about returns on large data center investments.
Semiconductor Stocks Rebound
Semiconductor stocks also recovered, with Nvidia rising 2.9% after losing approximately $430 billion in market value over the previous two sessions. Marvell Technology advanced 6.5%, and Micron gained 5.8%. Data storage companies followed suit, with Seagate Technology up 6.57% and Western Digital adding 4.6%.
CoreWeave's performance has become a key barometer for investor confidence in the AI infrastructure sector. Its debt-funded expansion had raised questions about whether customer demand would justify its spending plans. The latest results helped ease those concerns, though investors remain watchful of capital expenditure trends across the industry.
Nvidia Rebounds Amid Leadership Scrutiny
Nvidia's recovery came after a difficult start to the week, triggered by reports about CEO Jensen Huang's relationship with a Chinese businesswoman allegedly linked to espionage. The chipmaker had fallen nearly 10% over the prior two sessions, dragging down the broader tech sector. While the rebound has lifted sentiment, uncertainty around Nvidia's leadership and the AI investment outlook persists.
Investors are also monitoring Anthropic's planned initial public offering. The Claude chatbot developer is targeting a valuation of up to $1.4 trillion and could raise as much as $64.4 billion. This listing underscores the massive capital flows into AI and may influence how investors allocate funds between established tech giants and emerging AI firms.
Fed Rate Expectations Weigh on Markets
Despite the tech rally, monetary policy concerns remain. October's US Consumer Price Index rose 0.4% month-over-month, exceeding expectations and reinforcing the likelihood of a Federal Reserve rate hike in December. Markets are pricing in a near-certain quarter-point increase, with the probability of a larger 50-basis-point move at around 13.2%, according to CME FedWatch data.
Fed Governor Christopher Waller has suggested that a larger increase may be warranted if inflation worsens. Higher rate expectations have added volatility to equities, particularly for technology companies sensitive to borrowing costs. Meanwhile, oil prices recovered by more than 1% after hitting two-month lows, and US bond markets remained closed for Veterans Day.
This article is for informational purposes only and does not constitute financial advice.
