US stocks today: Nasdaq rebounds as chipmakers rally, Apple slides ahead of US midterm results

Reuters

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The rebound came as investors continued to reassess the outlook for technology stocks following recent losses driven by concerns over whether massive investments in artificial intelligence infrastructure will generate sufficient returns.

S&P 500 gained 26.65 points, or 0.35%, to end at 7,568.05 points, while the Nasdaq Composite gained 201.31 points, or 0.83%, to 25,365.67. The Dow Jones Industrial Average fell 206.00 points, or 0.40%, to 51,782.29.

Chipmakers lead the recovery

Chip stocks were among the biggest gainers, with Micron Technology and Nvidia advancing. The Philadelphia Semiconductor Index also jumped, while AMD rose ahead of its quarterly results. Microsoft and Amazon ended higher as well, Reuters reported.

Apple moved in the opposite direction after warning that rising memory chip costs would continue to pressure its gross margin in the holiday quarter.

"This is a rotation from safe tech, like Apple, into riskier tech, like chipmakers," said Jay Hatfield, chief executive officer at Infrastructure Capital Management. "It's clear dip buying in a higher risk, Nasdaq driven market."

The rebound followed a difficult stretch for technology stocks. The Nasdaq 100 had confirmed a correction on Monday, closing more than 10% below its October 6 record, as concerns mounted over the scale of AI infrastructure spending and its near term returns. Sharp post earnings declines in Amazon and Alphabet last week had added to those concerns, Reuters reported.

Midterm elections in focus

Investors also kept an eye on the US midterm elections, which could influence the outlook for fiscal policy, taxation, regulation and government spending.

"This will be good to put behind us as it has been an anticipated volatility event for quite some time," said Ken Mahoney, CEO of Mahoney Asset Management.

Morgan Stanley analysts said the elections could remove a major market overhang, adding that the correction in US equities that began in June was in its "final innings".

Meanwhile, Palantir Technologies shares dipped despite the analytics software provider forecasting fourth quarter revenue above estimates after beating third quarter expectations, Reuters reported.