New York's financial markets experienced a rebound on Friday, as major indexes reversed earlier losses from the week, driven primarily by a partial recovery in technology stocks and a halt in bitcoin's recent rapid decline. The S&P 500 index increased by 1.2%, positioning itself for only its second positive session over an eight-day span. Concurrently, the Dow Jones Industrial Average advanced by 814 points, or 1.7%, around mid-morning Eastern Time, while the Nasdaq composite index rose 1%.
Key contributors to these gains were semiconductor companies, which benefited from expectations of sustained capital deployment in artificial intelligence (AI) technologies. Nvidia's shares surged 6.2%, reducing its weekly losses to just above 10%, while Broadcom's stock climbed 5%, easing its decline from 6.3% earlier in the week. These two companies emerged as primary drivers lifting the S&P 500 index on the day.
Investor enthusiasm in these chipmakers was linked to the broader anticipation of ongoing corporate expenditure on AI initiatives. For instance, Amazon disclosed late Thursday its intention to invest approximately $200 billion this year, targeting critical growth areas including AI, semiconductor manufacturing, robotics, and satellite systems operating in low Earth orbit. This announcement echoed similar large-scale investment commitments made recently by Alphabet.
However, such substantial spending plans have also generated investor unease. Questions linger about whether these hefty financial outlays will translate into significantly enhanced profitability over time. Reflecting these concerns, Amazon’s share price declined by 8.3% in response to its announcement.
Despite Friday’s rally, the S&P 500 index is on track to record its third losing week within the past four. Market sentiment throughout the week was dampened not only by uncertainty around the return on large AI-related investments by dominant technology firms but also by worries that AI advancements could siphon customers from traditional software companies. This sentiment intensified following AI firm Anthropic’s release of freely accessible tools designed to automate services, such as those in the legal sector, which further pressured software stocks.
In the cryptocurrency domain, bitcoin stabilized after a multi-week plunge which had seen its value fall to less than half its peak in October. The cryptocurrency rebounded to above $68,000 after dipping near $60,000 late Thursday.
Metals markets also exhibited reduced volatility after recent fluctuations. Gold prices rose 1.6% to reach $4,968.20 per ounce, while silver experienced a modest decline of 0.8%.