A rebound in artificial-intelligence stocks drove Wall Street higher on Wednesday, with the S&P 500 rising 1.3 per cent and the Nasdaq jumping 1.9 per cent, even as the Australian sharemarket is set to decline at the open by 50 points, or 0.5 per cent.
The rally was led by CoreWeave, which rents access to AI chips over the cloud, after it reported a smaller quarterly loss than analysts expected and raised its full-year revenue forecast. Its shares surged 25 per cent. The company's CEO, Michael Intrator, said CoreWeave has roughly $US9 billion ($13.1 billion) in customer prepayments and deposits expected in the next three months, along with other cash sources, leading some analysts to say it is making progress toward self-funding.
Other AI-related stocks also climbed: Micron Technology rallied 13.4 per cent, Broadcom added 6.6 per cent, and Nvidia rose 3.8 per cent. Nvidia’s board is investigating CEO Jensen Huang after he admitted to a relationship with a businesswoman who allegedly fed intelligence and advanced chips to China.
Anthropic’s initial public offering has drawn multiple times the orders for available shares, according to people familiar with the matter, as demand accelerates for potentially the biggest first-time share sale ever.
"The rebound in the tech sector is something that is helping investors to be less concerned about whether the upcoming Anthropic IPO will get done or not," said Matt Maley at Miller Tabak.
Stocks outside AI fared less well. The Dow Jones Industrial Average edged up just 57 points, or 0.1 per cent, and slightly more S&P 500 stocks fell than rose. United Airlines lost 1.6 per cent as stocks broadly felt pressure from a rise in oil prices, which recovered some of their losses from earlier in the week. Brent crude added 2.9 per cent to $US94.10 a barrel.
The US bond market was closed Wednesday for Veterans Day, but yields jumped the previous day after a worse-than-expected inflation reading raised expectations of coming Federal Reserve interest-rate hikes.
The Australian dollar was weaker at US68.48¢. In Asia, South Korea's Kospi jumped 2.6 per cent, Hong Kong's Hang Seng fell 1 per cent, and Shanghai stocks rose 0.5 per cent as China's Singles Day online shopping festival began.
Analysis
Why This Matters
- The AI-driven rally is helping restore confidence after last week's sharp sell-off on concerns about a potential industry slowdown.
- The oversubscribed Anthropic IPO signals strong investor appetite for big AI listings, potentially making it one of the largest first-time share sales ever.
- Persistent inflation and rising bond yields pose headwinds for the broader market, particularly rate-sensitive sectors like real estate.
Background
Wall Street has been volatile recently, with AI stocks at the centre of sharp swings. Last week, the market was rattled by worries about a potential slowdown in AI-related businesses and by Democratic victories in US midterm elections, which raised fears of restrictions on data-centre construction. The Federal Reserve has been under pressure to keep raising interest rates after inflation data came in higher than expected.
Key Perspectives
- Analysts at Miller Tabak (Matt Maley): The tech-sector rebound is helping investors feel less concerned about whether the Anthropic IPO will go ahead.
- CoreWeave CEO Michael Intrator: The company has roughly $US9 billion in customer prepayments and deposits expected in the next three months, along with other cash sources.
What to Watch
- Continued direction of AI stocks, particularly Nvidia's share price amid the board investigation into Jensen Huang.
- The pricing and first-day trading of Anthropic's IPO, which could set a benchmark for tech listings.
- Next moves by the Federal Reserve following the worse-than-expected inflation report.
Checked
12 claims in this story checked against 1 source: 12 supported.
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- SupportedAI stocks lifted Wall Street.The Age - Latest News: “A rebound for stocks in the artificial intelligence industry is lifting the US market.”
- SupportedThe ASX was set to fall at the open.The Age - Latest News: “The Australian sharemarket is set to decline, with futures pointing to a loss of 50 points, or 0.5 per cent, at the open.”
- SupportedCoreWeave shares surged 25 per cent after its results.The Age - Latest News: “CoreWeave, which rents out access to AI chips to customers over the cloud, leaped 25 per cent after reporting a smaller loss for the latest quarter than analysts expected.”
- SupportedAnthropic’s IPO drew multiple times the orders for shares available.The Age - Latest News: “Anthropic’s initial public offering has drawn multiple times the orders for the shares available, according to people familiar with the matter”
- SupportedThe S&P 500 rose 1.3 per cent on Wednesday.The Age - Latest News: “The S&P 500 rose 1.3 per cent”
- SupportedThe Nasdaq rose 1.9 per cent on Wednesday.The Age - Latest News: “The Nasdaq composite rallied 1.9 per cent”
- SupportedASX futures pointed to a 50-point, or 0.5 per cent, loss at the open.The Age - Latest News: “The Australian sharemarket is set to decline, with futures pointing to a loss of 50 points, or 0.5 per cent, at the open.”
- SupportedCoreWeave reported a smaller quarterly loss than analysts expected.The Age - Latest News: “after reporting a smaller loss for the latest quarter than analysts expected.”
- SupportedCoreWeave CEO Michael Intrator said the company had roughly US$9 billion in customer prepayments and deposits expected in the next three months.The Age - Latest News: “CoreWeave CEO Michael Intrator said his company has roughly $US9 billion ($13.1 billion) in customer prepayments and deposits expected in the next three months”
- SupportedNvidia’s board was investigating CEO Jensen Huang after he admitted to a relationship with a businesswoman who allegedly fed intelligence and advanced chips to China.The Age - Latest News: “Its board is investigating its CEO, Jensen Huang, after he admitted to a relationship with a businesswoman who allegedly fed intelligence and advanced chips to China.”
- SupportedThe IPO was potentially the biggest first-time share sale ever.The Age - Latest News: “as demand accelerates for potentially the biggest first-time share sale ever.”
- SupportedMatt Maley of Miller Tabak said the tech-sector rebound was helping investors be less concerned about whether the upcoming Anthropic IPO would get done.The Age - Latest News: ““The rebound in the tech sector is something that is helping investors to be less concerned about whether the upcoming Anthropic IPO will get done or not,” said Matt Maley at Miller Tabak.”