US stocks rebounded sharply on Friday, snapping a four-day losing streak even after a hotter-than-expected CPI report pushed rate-hike odds higher. The Dow, S&P 500 and Nasdaq all closed higher, but weekly losses remained after four straight down days. Dell and Super Micro surged on Oracle's AI spending plans, while Oracle itself gave up early gains to close lower.
Major indices snap four-day losing streak
The Dow Jones Industrial Average rose 509.05 points, or 0.98%, to 52,578.27 on Friday. The S&P 500 added 65.28 points, or 0.86%, to close at 7,656.97, while the Nasdaq Composite gained 251.31 points, or 0.96%, to 26,333.04.
Although the CPI report came in hotter than expected, pushing the odds of another Federal Reserve rate hike toward 90%, Treasury yields pulled back from their session highs, oil prices retreated, and buyers returned to equities. The rebound spread broadly across the major indices, which gained between 0.45% and 0.98% on the day.
Weekly losses persist despite Friday rebound
One strong session was not enough to erase the losses built up earlier in the week. The Dow fell 1.57% for the week, while the S&P 500 dropped 0.80% and the Nasdaq Composite lost 0.66%. The Russell 2000 was the week's weakest performer, falling 2.41%, since smaller companies tend to be more sensitive to borrowing costs and are particularly vulnerable when yields rise and expectations for tighter Fed policy increase.
Dell and Super Micro rally on Oracle's AI spending
Dell Technologies surged 11.94% to a record close near $567.12 as investors focused on the continuing buildout of AI infrastructure. The catalyst was not a Dell earnings report but Oracle's data-center investment plans: Oracle is expected to spend roughly $90 billion to $95 billion this fiscal year to expand computing capacity for AI demand.
Dell shares are up 350% this year. Super Micro Computer, which supplies similar servers, GPU systems and liquid-cooling technology, is seen as another potential beneficiary of that same spending cycle.
Oracle gives up early gains after earnings
Oracle shares initially jumped more than 8% after stronger-than-expected earnings but reversed to close down 1.78% at $150.22. The company reported adjusted earnings of $1.92 per share, above expectations of $1.74, while revenue rose 30% to $19.3 billion, also beating estimates. Cloud infrastructure revenue surged 121%, and contracted revenue not yet recognized rose to $664 billion.
Even so, investors remain concerned about the capital Oracle must commit to data centers and its reliance on a handful of very large AI customers; the company burned $5.4 billion in free cash flow during the quarter, though that was better than feared.
Source: Investinglive
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