AI Stocks: Nvidia leads rebound after global selloff

Investors in artificial intelligence saw their losses shrink on Friday as major tech stocks rallied. The recovery halted a week of steep declines that had spread from New York to Tokyo and Seoul. For holders of tech shares, the Friday gains offered a brief reprieve after the market’s worst trading day since April 2025.

The S&P 500 index climbed 0.9% on Friday. This move reduced the index's total loss for the week to 2.1%. The Nasdaq composite, which is heavily weighted toward technology, rose 1.6%. The Dow Jones Industrial Average ended nearly flat, down just 3 points. As of 11:45 a.m. Eastern time, the broader market remained mixed, with slightly more stocks falling than rising within the S&P 500.

The week began with a sharp sell-off triggered by Democratic victories in U.S. midterm elections. Investors feared that a split government would slow the construction of new AI data centers. Voters in several states expressed concern over rising power bills caused by these facilities. Additionally, rising borrowing costs and fears of a valuation bubble had already weighed on the sector earlier in the week.

Nvidia, the leading maker of AI chips, was the primary driver of Friday's recovery. Its stock gained 3.7%, recovering from drops of 9.3% and 3.2% on the previous two days. Other companies involved in the AI infrastructure build-out also saw gains. Lam Research, which manufactures semiconductor equipment, climbed 9.9% after announcing a program to buy back up to $25 billion in its own shares.

IREN, a provider of data centers and software for AI training, reported quarterly results that beat analyst estimates. The company’s stock jumped 19.5% on the news. It also disclosed two new contracts signed after the quarter ended. Daniel Roberts, co-CEO of IREN, stated that the company owns the land, power, and data centers, which allows it to fund growth and set its own pace.

Gains in the AI sector lifted related stocks as well. CoreWeave, which rents access to AI chips, rose 4.5%. Micron Technology, a seller of computer memory, climbed 5.9%. In contrast, non-tech stocks showed mixed results. Axon Enterprise, the maker of Tasers, fell 17.6% after reporting weaker quarterly results and announcing a $1.2 billion investment in drone company Skydio. Charter Communications dropped 5% after posting a quarterly loss.

In the bond market, yields recovered some ground from earlier in the week. The yield on the 10-year Treasury note edged up to 4.85% from 4.84% late Thursday. This followed a period where yields had spiked above 5.30% in the previous month due to inflation and debt concerns. A report showing that U.S. employers hired more workers last month than expected helped support bond yields.

The strong jobs data suggests the U.S. economy remains resilient despite high inflation. However, it also increases the likelihood that the Federal Reserve will raise short-term interest rates at its December meeting. Traders now see a greater probability of a hike, according to CME Group data. Rate hikes aim to control inflation but make borrowing more expensive for businesses and consumers.

A separate survey from the University of Michigan indicated that consumer sentiment improved unexpectedly. Sentiment rose among lower- and middle-wealth Americans but fell among those with the largest stock portfolios. The survey also showed that expectations for inflation over the next year eased, a development that could help prevent a cycle where high inflation expectations drive further price increases.

The next Federal Reserve meeting is scheduled for December. Until then, markets will monitor economic indicators and corporate earnings for signs of how the split government in Washington affects business planning and consumer spending.