New York: AI stocks are bouncing back Friday and recovering some of their brutal sell-off from the last two days. The rest of the US stock market, though, is lagging behind following a whirlwind few days of Wall Street trying to sort out what this week’s sweeping victories by Democrats in the US midterm elections will mean for the economy.
The S&P 500 rose 0.3% to trim its loss for the week, which may be its worst since the spring of 2025 when President Donald Trump unveiled his “Liberation Day” tariffs. The Dow Jones Industrial Average was down 476 points, or 0.9%, as of 9:35 am Eastern time, and the Nasdaq composite was 1.1% higher.
The relative steadiness for Wall Street halted what had been a worldwide tumble for stocks. Indexes dropped 6% in Tokyo and 6% in Seoul following the US market’s sell-off on Thursday.
European indexes have fewer stocks tied to the artificial-intelligence industry, but Germany’s DAX nevertheless lost 2.5%.
Friday’s biggest lift for the S&P 500 came from Nvidia, the chip company that’s become the face of the boom and possible bust of the AI frenzy. Its stock climbed 5.6%, coming off drops of 9.3% and 3.2%.
It and other companies tied to the build-out of AI data centers tumbled this week on worries that Democratic victories in statehouses across the country could mean a slowdown in further construction, particularly in Texas.
Voters across political parties say they’re wary about AI and don’t like increases to power bills caused by data centers.
That built on top of worries already shaking the industry that further construction of AI data centres may slow because of how expensive it’s become to borrow money. Before that, even, critics were saying AI stock prices had shot too high and were in a bubble.
But political power in Washington will still be split between a Democratic Congress and a White House run by Trump, who retains the power to veto. That could limit federal efforts to rein in AI data centre construction.
In the meantime, companies in the industry still see strong growth ahead. IREN, a company that delivers data centres, compute and software for AI training, reported stronger results for the latest quarter than analysts expected. Its stock rose 13.7%, and it also announced two new contracts signed since the end of the quarter.
“We own the land, the power and the data centres under all of it, which gives us more ways to fund growth and lets us set its pace,” co-CEO Daniel Roberts said.
Lam Research, a company whose equipment and services help make semiconductors, climbed 8.8% after announcing a program to send up to $25 billion to its investors by buying back shares of its own stock.
That helped other stocks tied to AI data centres recover some of their own sharp losses. CoreWeave, which rents out access to AI chips to customers over the cloud, rose 5.8%. GE Vernova, which is helping to power data centres, added 4%.
Outside of AI, though, the US stock market was shakier, and the wide majority of Wall Street fell.
Charter Communications sank 5.5% after the internet and video provider reported a loss for the latest quarter, when analysts were expecting a profit. The company behind the Spectrum brand announced a program that hopes to save $2 billion in annual operating costs.
In the bond market, Treasury yields recovered some of their sharp drops from earlier in the week, triggered by tumbling stock prices and hopes that split control of Washington could limit how much more the US government is adding to its debt.
Helping to support yields was a report showing US employers hired many more workers last month than economists expected. It’s the latest signal that the US economy continues to chug along despite high inflation and discouraged Americans.
