Nvidia climbs 3.7% as AI stocks reverse two-day slide

Nvidia shares gained 3.7% on Friday, leading a rebound for artificial intelligence stocks that had fallen sharply over the previous two trading days.

The S&P 500 rose 0.9%, reducing its weekly decline to 2.1%. The Nasdaq composite climbed 1.6%, while the Dow Jones Industrial Average ended the morning session down 3 points, or less than 0.1%, as of 11:45 a.m. Eastern time.

Global markets had tumbled earlier in the week following Democratic victories in U.S. midterm elections. Investors feared the political shift could slow the construction of AI data centers, particularly in Texas, where voters expressed concern over rising power bills.

Japanese stocks fell 6% on Friday, and South Korean shares dropped 6% following the U.S. market’s plunge on Thursday. Germany’s DAX index lost 2%, despite having fewer companies tied to the AI sector.

Lam Research stock jumped 9.9% after the semiconductor equipment maker announced a plan to return up to $25 billion to shareholders through stock buybacks. IREN, a provider of data centers and compute resources for AI training, reported quarterly results that beat analyst estimates. Its stock rose 19.5% after the company announced two new contracts signed since the quarter ended. Co-CEO Daniel Roberts stated that owning the land, power, and data centers allows the company to set the pace for growth.

Other AI-related stocks also recovered. CoreWeave, which rents access to AI chips, rose 4.5%. Micron Technology, which sells memory for computers, gained 5.9%.

In the bond market, the yield on the 10-year Treasury note edged up to 4.85% from 4.84% late Thursday. This move followed a report showing U.S. employers hired many more workers last month than economists had predicted. The strong jobs data suggested the economy remains resilient despite high inflation, leading traders to increase the estimated probability of a Federal Reserve interest rate hike at its December meeting. A separate survey from the University of Michigan indicated that consumer sentiment improved for lower- and middle-wealth Americans, while inflation expectations for the coming year eased.

Outside the AI sector, mixed results continued. Axon Enterprise, the seller of Tasers, fell 17.6% after reporting weaker quarterly results than expected. The company also announced a $1.2 billion investment in drone technology firm Skydio. Charter Communications dropped 5% after reporting a quarterly loss when analysts had projected a profit.