A single stock did most of the heavy lifting on Wall Street Monday, as Amazon's sharpest one-day gain in months helped the S&P 500 and Nasdaq Composite claw back a slice of the previous week's steep AI-driven selloff — even as most individual stocks in the benchmark index still finished lower.
The S&P 500 rose 0.41% to close at 7,690.73, and the Nasdaq Composite jumped 1.11% to 26,430.89. The Dow Jones Industrial Average was essentially flat, slipping 0.07% to 51,966.03, as gains in technology shares failed to spread broadly across the rest of the index.
Amazon Leads, Chips Only Partly Recover
Amazon shares surged roughly 5% after Morgan Stanley named the company a top pick, erasing most of the stock's losses from the prior week, according to a Yahoo Finance report on Monday's trading. Palantir rose more than 4% after announcing a new government-cloud partnership, and Datadog gained a similar amount after Bernstein upgraded the stock on stronger AI-related demand.
Semiconductor stocks, which had fallen for eight consecutive sessions — their longest losing streak in 16 years — staged a rebound of their own, though they pulled back from their best levels of the day, according to trading-desk notes from Investrade. Memory-chip makers led the group: SanDisk rose about 6%, with Micron, SK Hynix and Western Digital also higher. Chipmakers remain up more than 50% for the year despite the recent slide.
Not every AI-linked stock joined the rally cleanly. CoreWeave gave up an early gain and finished only slightly higher at $61.12 — just above its July closing low — even after Goldman Sachs upgraded the cloud-computing company to Buy and cut its price target to $106 from $139, reflecting how far shares had already fallen.
A Market Growing Choosier About AI
The session capped a volatile stretch. The prior week, the S&P 500 fell nearly 2% and the Nasdaq dropped more than 4% as investors grew nervous about the scale of borrowing behind the AI data-center buildout and whether hyperscalers' spending plans were outrunning near-term returns.
The divide reflects a broader reassessment of AI infrastructure spending that has rippled through markets since early October, as a handful of hyperscalers and specialized data-center operators have taken on tens of billions of dollars in new debt and equity financing to build out power and computing capacity — spending that investors increasingly want to see translate into revenue rather than simply scale.
We can't just go and buy all the AI companies because they all dipped.
Mark Malek, chief investment officer, Siebert Financial
Malek's comment, offered as CoreWeave's muted finish illustrated the point, captured a shift in investor behavior: rather than buying the broad AI trade indiscriminately on dips, traders are increasingly picking winners — Amazon, Palantir and Datadog among them — while leaving laggards like CoreWeave to prove themselves first. Roughly two-thirds of S&P 500 constituents still finished Monday's session lower, underscoring how narrow the rally was even as the headline indexes advanced.
Markets face an immediate test Tuesday morning, with GE Aerospace and Halliburton both due to report third-quarter results before the opening bell — among the first of a packed week of earnings that investors will parse for signs of whether corporate America's AI-linked spending is paying off. Brent crude's continued volatility, swinging on dueling signals from eased Russia sanctions and tightened Strait of Hormuz shipping, adds another variable traders will be watching as the week unfolds.
