Wall Street’s main indexes climbed on Monday, as investors attempted to shake off last week’s AI anxieties while awaiting more clarity on the controversy surrounding Nvidia CEO Jensen Huang.
In midday trading, the Dow Jones Industrial Average jumped 1,035 points, or 2%, to 52,321.
The S&P 500 and the Nasdaq both advanced 2%.
The gains kick off a pivotal week expected to offer some insight into whether the selloff post the midterms last week went too far or was warranted. Analysts warned that several concerns were converging under the surface.
Shares of Nvidia, the second most valuable company in the world, fell more than 5% after an internal investigation into whether CEO Huang had been targeted by a foreign intelligence effort raised questions about his future at the AI chipmaker.
“This was just the cherry on top for investors looking to pull out of AI-linked stocks. It’s a very bad headline that’s affecting tech stocks,” said Nadia El Bilassy, senior market analyst at Equiti Group.
The focus on Nvidia may subside later this week “when we have more important things to discuss, like the inflation data,” she added.
The Labor Department is scheduled to release its Consumer Price Index report for October on Tuesday, with economists polled by Reuters expecting a 2.7% increase year-over-year.
Fears of a December rate hike also persisted following October’s stronger-than-expected jobs data.
Wall Street brokerages including Morgan Stanley and UBS called last week’s rout in the AI trade overdone, arguing that the risks of extreme regulation of data center developments under a Democrat-controlled Congress are unlikely to play out.
Chips inch higher, markets assess earnings
Shares of some chipmakers were up, with Marvell Technology and Broadcom rising 5% and 6.5%, respectively, while Intel and Qualcomm each rose nearly 2%.
Among the hyperscalers, Microsoft, Alphabet, Meta and Amazon were up between 2.5% and 5%.
Elon Musk-led Tesla and SpaceX also advanced 4.5% each.
Shares of investment giant KKR rose 1% after its quarterly profit hit a record high. Constellation Energy, an energy firm with exposure to the AI boom, rose 2.8% after its adjusted third-quarter profit surpassed expectations.
Of the 335 companies in the S&P 500 that had reported earnings as of Thursday, 82.4% beat estimates, according to Tajinder Dhillon, head of earnings and equity research at LSEG Data and Analytics.
Berkshire Hathaway’s class B shares were 0.1% lower after the conglomerate reported lower third-quarter profit.