CNBC_ The US Nasdaq index rose by 0.9% to 26,381 points at the start of the week's trading on Monday, October 19, as investors moved to buy technology sector stocks following the wave of losses that hit artificial intelligence stocks last week.
In contrast, the Dow Jones Industrial Average dropped by about 0.2% to 51,883 points, while the S&P 500 index rose by 0.5% to 7,692 points.
The S&P 500 had recorded its largest weekly loss since June during the past week, declining by about 2%, while the Nasdaq dropped by about 4.5% following a 4-week consecutive winning streak.
The information technology sector declined by more than 6% over the past week, recording its worst weekly performance since April 2025, and was the most exposed to net selling among global sectors, while hedge fund managers sold tech stocks at the fastest pace on record, according to Goldman Sachs data.
At the stock level, Intel shares rose by 5% after JPMorgan analysts upgraded their rating for the stock, while Advanced Micro Devices and Micron Technology shares each climbed by about 3%.
Additionally, CoreWeave shares rose by about 4% after receiving an upgrade from Goldman Sachs, following a 25.21% decline over the past week amid concerns regarding the cloud computing company's ability to service its debt.
Concerns grew regarding the sustainability of the artificial intelligence investment wave, after reports citing sources indicated that Anthropic's revenues reached $16.8 billion in the third quarter, compared to $11.6 billion in the second quarter. Despite revenue growth, the figures raised investor concerns regarding the pace of growth in light of expanding spending on investments and AI infrastructure.
Intel shares rose by more than 5% after Monday's market open, after JPMorgan raised its recommendation for the stock from "underweight" to "neutral", while maintaining the price target at $85.
Analyst Harlan Sur wrote in a note released on Sunday that the stock's 36% decline from its peak recorded in late June, coinciding with its approach to the target price, contributed to improving the risk-reward ratio, making it more balanced.
He added that the team's performance and competitiveness in the core client computing and data center markets have improved since Lip-Bu Tan was appointed CEO, and the team's performance in next-generation manufacturing has also witnessed a notable improvement.
He pointed out that the increase in artificial intelligence workloads, which require intensive processing using central processing units, alongside the tight supply of the latest silicon technologies, may support continuous positive revisions to earnings-per-share forecasts during the upcoming earnings announcement season and through the end of 2027, despite short-term concerns regarding the sustainability of AI infrastructure spending.
CoreWeave shares rose by about 3% in post-open trading following a week marked by sharp volatility, after concerns over the cloud computing company's ability to service its debt triggered a sell-off hitting artificial intelligence-related stocks.
The stock had ended last week's trading down by 25.21%.
Mislav Matejka, a strategist at JPMorgan, stated that the stabilization of bond yields could support equities by enhancing the sustainability of the economic cycle, easing pressures on artificial intelligence and consumer financing, and limiting pressures resulting from lower valuation multiples.
He added that rising yields led to a decline in the forward price-to-earnings ratio for both the AC World global equity index and the S&P 500 by about 3 points each, and for European equities by about 2 points, noting that the continued decline of these ratios may not be necessary.
US Treasury yields declined at the start of the week, while futures for the S&P 500 and Nasdaq 100 indices rose following a week of losses on Wall Street.
Goldman Sachs stated that the information technology sector within the S&P 500 came under significant pressure last week amid intensive selling targeting AI-related stocks.
The bank explained in a recent note that the sector declined by more than 6% during the week ending October 16, and was by far the most exposed to net selling among global sectors.
The sector recorded the largest drop in total investment positions in two months, alongside the highest level of net selling since the tracking of this data began in 2016.
The bank pointed out that the sales were driven by the liquidation of existing long positions and, to a lesser extent, by short selling.
