On Wednesday, American equity markets posted a gentle advance despite the holiday calendar – the stock exchange stayed open for Veterans Day while the bond market observed a closure. The Dow Jones Industrial Average added 0.2%, the S&P 500 rose 1.4%, and the Nasdaq Composite surged more than 2%. Traders also shifted their positioning toward a possible Federal Reserve rate hike in the upcoming month, a move that helped lift the equity rally even as cryptocurrencies slipped lower.
Market indices and monetary backdrop
The modest lift in the Dow and S&P was anchored by optimism that the Federal Reserve may pause after a series of hikes, yet recent inflation data kept the conversation alive. The 10-year Treasury yield briefly breached the 5% threshold after hotter-than-expected CPI numbers, and comments from Fed governor Michelle Bowman underscored that “there is still work to do to bring inflation closer to 2%.” With the bond market closed for the holiday, investors turned back to equities, favouring sectors that appeared resilient to higher borrowing costs.
Meanwhile, the broader market sentiment was coloured by a noticeable pull-back in crypto assets, which fell alongside the heightened focus on monetary policy. The divergence between traditional equities and digital currencies highlighted a risk-off tilt among some participants, even as the main indices continued to creep higher on the back of sector-specific catalysts.
Chip rally sparked by CoreWeave and Nvidia
The technology segment led the upside, driven primarily by a rebound in Nvidia shares and a dramatic surge in CoreWeave stock. After two consecutive days of steep declines tied to a scandal involving CEO Jensen Huang, Nvidia managed to claw back roughly 5% during the session, stabilising at around $176 per share. Although the company remains down about 14% for the month and has shed roughly $700 billion in market value, the bounce signalled that investors are willing to overlook short-term turbulence in favour of its dominant position in AI compute.
CoreWeave, a cloud-native AI infrastructure provider backed by Nvidia, posted a revenue outlook that beat consensus and announced $9 billion in customer pre-payments for the next three months. The guidance alleviated concerns about the firm’s heavily debt-laden balance sheet and prompted its shares to jump as much as 25% during midday trading, ending the day up 19%. The company also signalled that it would avoid taking on additional expensive debt through 2027, a pledge that resonated with investors wary of rising financing costs.
AI-related names and future outlook
Beyond the headline makers, other AI-centric stocks displayed mixed reactions. Quantum-focused firms such as D-Wave Quantum posted revenue growth and a 611% surge in bookings, while Rigetti Computing missed revenue expectations, causing its shares to retreat. The broader “neocloud” arena, which includes players like Nebius, also benefited from CoreWeave’s positive news, with Nebius gaining roughly 15% in early trade. Analysts largely continue to rate Nvidia as a buy, citing its extensive software stack, strategic acquisitions, and a forward P/E near 11× for fiscal 2028, suggesting considerable upside potential as AI spending is projected to exceed $1 trillion in the coming year.
