NEW YORK — AI stocks are bouncing back Friday and recovering some of their sell-off from the last two days. The rest of the U.S. stock market is mixed following a whirlwind few days of Wall Street trying to sort out what this week's sweeping victories by Democrats in the U.S. midterm elections will mean for the economy.
The S&P 500 rose 0.9% and trimmed its loss for the week to 2.1%. The Dow Jones Industrial Average was down 3 points, or less than 0.1%, as of 11:45 a.m. Eastern time, and the Nasdaq composite was 1.6% higher.
Even with this week's extreme swings, the S&P 500 remains only 5.1% below its all-time high, which was set last month.
Friday's relative steadiness for Wall Street halted what had been a worldwide tumble for stocks. Indexes dropped 6% in Tokyo and 6% in Seoul following the U.S. market's plunge on Thursday, which was its worst since President Donald Trump shook markets in April 2025 with his "Liberation Day" tariffs. European indexes have fewer stocks tied to the artificial-intelligence industry, but Germany's DAX nevertheless lost 2%.
Friday’s biggest lift for the S&P 500 came from Nvidia, the chip company that’s become the face of the boom and possible bust of the AI frenzy. Its stock climbed 3.7%, coming off drops of 9.3% and 3.2%.
It and other companies tied to the build-out of AI data centers tumbled this week on worries that Democratic victories in statehouses across the country could mean a slowdown in further construction, particularly in Texas. Voters across political parties say they're wary about AI and don't like increases to power bills caused by data centers.
That built on top of worries already rattling the industry that further construction of AI data centers may slow because of how expensive it's become to borrow money. Before that, even, critics were saying AI stock prices had shot too high and were in a bubble.
But political power in Washington will still be split between a Democratic Congress and a White House run by the Republican Trump, who retains the power to veto. That could limit federal efforts to rein in the AI industry.
In the meantime, companies in the industry still see strong growth.
IREN, a company that delivers data centers, compute and software for AI training, reported stronger results for the latest quarter than analysts expected. Its stock jumped 19.5%, and it also announced two new contracts signed since the end of the quarter.
“We own the land, the power and the data centers under all of it, which gives us more ways to fund growth and lets us set its pace,” co-CEO Daniel Roberts said.
Lam Research, a company whose equipment and services help make semiconductors, climbed 9.9% after announcing a program to send up to $25 billion to its investors by buying back shares of its own stock.
That helped other stocks that have benefited from the build-out of AI data centers recover some of their own sharp losses. CoreWeave, which rents out access to AI chips to customers over the cloud, rose 4.5%. Micron Technology, which sells memory for computers, climbed 5.9%.
Outside of AI, the U.S. stock market was mixed, and slightly more stocks fell within the S&P 500 than rose.
Axon Enterprise tumbled 17.6% after the seller of Tasers reported weaker results for the latest quarter than analysts expected. It also announced a $1.2 billion investment in Skydio, a drone technology company.
Charter Communications sank 5% after the internet and video provider reported a loss for the latest quarter, when analysts were expecting a profit.
In the bond market, Treasury yields recovered some of their sharp drops from earlier in the week, triggered by tumbling stock prices and hopes that split control of Washington could limit how much more the U.S. government adds to its debt.
The yield on the 10-year Treasury edged up to 4.85% from 4.84% late Thursday. It had topped 5.30% last month when worries about inflation, higher interest rates and rising government debt were spiking.
Helping to support yields was a report showing U.S. employers hired many more workers last month than economists expected. It's the latest signal that the U.S. economy continues to chug along despite high inflation.
On one hand, the encouraging data could mean the U.S. economy may be able to absorb a slowdown in construction of AI data centers. But at the same time, the strong growth in jobs could push upward on inflation. Following the report, traders saw a greater probability of the Federal Reserve hiking its short-term interest rate at its next meeting in December, according to data from CME Group.
Rate hikes by the Fed can rein in inflation, but they do so by making borrowing money more expensive for everyone and slowing the overall economy.
A separate report, meanwhile, suggested that sentiment among U.S. consumers unexpectedly improved. The preliminary report from the University of Michigan said sentiment rose for lower- and middle-wealth Americans but fell for those with the largest stock portfolios.
Perhaps more importantly for the bond market, the survey also suggested expectations for inflation in the coming year eased for Americans. That could prevent a vicious cycle where expectations for high inflation drive behavior that only worsens inflation.
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AP Business Writer Yuri Kageyama contributed to this report.
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