US equity markets staged a partial recovery on Wednesday as strong earnings from AI infrastructure provider CoreWeave helped ease concerns about artificial intelligence spending, though lingering Federal Reserve rate hike expectations continued to weigh on sentiment across risk assets.
The S&P 500 gained 0.84% while the Nasdaq Composite advanced 1.44%, recovering from a sharp 4.4% decline on November 5. The Dow Jones Industrial Average remained down 68 points. The technology-heavy Nasdaq was buoyed by a broad rally in AI-related stocks following CoreWeave's better-than-expected third-quarter results.
CoreWeave shares jumped more than 12% after the cloud computing company reported third-quarter revenue ahead of expectations and raised its 2026 revenue and operating income guidance. The company also said it expects to become profitable on an adjusted basis in the first half of 2028. CoreWeave, which originated as a cryptocurrency mining operation before pivoting to AI infrastructure, has become a key barometer for investor confidence in the AI sector. Its debt-funded expansion had raised questions about whether demand and customer commitments would support its spending plans.
The recovery extended across AI infrastructure and semiconductor stocks. Nvidia rebounded 2.9% after losing approximately $430 billion in market value over the previous two sessions, pressured in part by reports about CEO Jensen Huang's alleged ties to espionage. Nebius Group gained 12.19%, Applied Digital added 6.38%, Marvell Technology rose 6.5%, and Seagate Technology advanced 6.57%.
However, renewed inflation concerns limited the recovery. October's US Consumer Price Index rose 0.4% month over month, exceeding economists' expectations and strengthening the case for a Federal Reserve rate increase in December. Markets are pricing in a near-certain quarter-point increase, with the probability of a larger 50-basis-point move rising to approximately 13.2% according to CME FedWatch data. Fed Governor Christopher Waller has indicated that policymakers should consider a larger increase if inflation worsens.
US employers added 165,000 jobs in October while unemployment remained at 4.1%. The central bank held rates at 3.75%–4.00% in October, with two policymakers already preferring an increase. Krisada Yoonaisil, Financial Markets Strategist at Exness, noted: "The US midterm result has raised new questions about AI infrastructure projects, but it has not eased concerns about inflation. Companies now need to show that their AI spending can generate profits, while the Fed still needs evidence that inflation is cooling."
For cryptocurrency markets, higher interest rate expectations typically pressure risk assets, while the recovery in AI infrastructure sentiment could provide support to AI-focused blockchain projects and mining companies that have pivoted toward AI computing. The next important data releases include producer prices on November 13 and further details on data-center policies that could influence confidence in AI-related companies.
