Key Points
- The Dow Jones soared by 540 points, Wall Street rebounded
- The S&P 500 rose, while Brent crude oil fell by 5%.
- NVIDIA weakens, market awaits key inflation report
On November 9th, the U.S. stock market rose, with the Dow Jones Industrial Average soaring by more than 540 points, and the S&P 500 index also increasing. Oil prices fell significantly, helping Wall Street to recover from last week's sell-off in artificial intelligence stocks.
At the opening of trading, the Dow Jones index rose by 540.52 points, an increase of 1.05%, to 51,826.25 points. The S&P 500 index rose by 0.81%, to 7,436.76 points; the Nasdaq Composite Index rose by 0.82%, to 24,780.15 points.
The Dow Jones and the S&P 500 rebounded, with a sharp drop in oil prices providing support.
Oil prices provided an important relief for financial markets. As diplomatic efforts between Washington and Tehran increased the prospects of mitigating supply disruptions, market sentiment improved.
Brent crude oil fell to around $93.50 per barrel during trading on Monday, a decline of about 5%; in the preceding week, its cumulative drop was close to 17%.
This decline continues the previous sharp drop in oil prices, with traders reducing the geopolitical premium associated with conflicts with Iran.
U.S. President Donald Trump stated that further U.S. military strikes would be "highly unlikely" if sufficient progress is made in negotiations, although a comprehensive agreement has not yet been reached.
Lowering energy prices could help ease inflation expectations and improve the prospects for companies facing higher transportation and production costs.
The rise in the S&P 500 also came after a difficult week. Last week, this benchmark index recorded its largest single-week decline since June.
NVIDIA declines, but there are signs of recovery in the broader AI market.
This rebound was not even. NVIDIA saw a significant decline after its board of directors announced an independent investigation into matters related to CEO Jensen Huang.
NVIDIA's stock price fell by about 5% in the morning session, continuing the pressure from its 9.3% decline on November 5th last week.
However, other large technology companies are showing signs of stabilization, and Microsoft, Alphabet, and Amazon have once again attracted buyers.
This differentiation indicates that investors are distinguishing between the risks of individual companies and the overall prospects of the AI infrastructure.
Last week's sell-off in tech stocks was partly due to market concerns regarding uncertainties in data center spending, financing conditions, and regulation.
Despite the continued growth in revenue related to AI, semiconductor companies have still experienced significant revaluation of their valuations previously.
The U.S. inflation report may determine whether the stock market rebound can continue
The next major test for Wall Street will come on November 10th. The U.S. Bureau of Labor Statistics will release the Consumer Price Index (CPI) for October at 8:30 a.m. Eastern Time.
Before the release of this report, U.S. employment data was stronger than expected, which raised market expectations that the Federal Reserve might raise interest rates again in December.
Investors are particularly concerned whether the decline in oil prices will ultimately help to alleviate broader inflationary pressures.
As previously mentioned in the inflation outlook, if consumer prices continue to rise, it may reinforce market expectations for more restrictive monetary policies.
This will bring additional pressure to technology companies that rely on high-cost long-term financing.
AI Infrastructure companies are also facing significant financial challenges. CoreWeave Plans to release its financial results after recent concerns in the credit market have raised doubts about debt-driven growth.
