US stock indices staged a sharp rebound as technology and semiconductor shares clawed back much of the prior session's losses. The recovery followed Citadel's purchase of a distressed AI-focused hedge fund's stock portfolio, and Amazon's earnings beat sent its shares higher in after-hours trading.
US stock indices closed sharply higher, led by a rebound in technology and semiconductor shares that clawed back much of Wednesday's steep losses. The S&P 500 gained 1.66% to close at 7,437.64, recovering its decline from the prior session, while the Nasdaq 100 jumped 3.36% to 28,106.35, erasing Wednesday's losses entirely.
Indices rebound across the board
The Dow Jones Industrial Average added 614.08 points, or 1.19%, closing at 52,213.21 — more than half of Wednesday's roughly 1,100-point slide. The NYSE Composite rose 2.78% and the Russell 2000 gained 1.37%.
Citadel buys distressed AI hedge fund's portfolio
The rebound followed a major hedge fund shake-up. Citadel agreed to buy the public equity portfolio of AI-focused hedge fund Situational Awareness after the fund suffered steep losses on leveraged AI bets. The episode shows how quickly leverage can turn a market correction into a liquidity crisis, forcing funds to liquidate positions regardless of their long-term conviction, and how firms with deep pockets can use periods of forced selling to acquire assets they view as undervalued.
It is certainly possible that the transaction partly fueled the rebound. Reports indicate Situational Awareness held significant leveraged positions in Nebius Group, Sandisk, and Bloom Energy, and all three stocks ranked among the day's strongest performers in the AI and semiconductor rebound. If the forced selling has largely run its course, the day's price action may have reflected buyers stepping in once that overhang was removed.
AI and chip stocks post double-digit gains
More than a dozen AI and chip-related stocks gained double digits. Nebius Group led with a 27.13% jump, followed by Bloom Energy's 26.49% gain and Sandisk's 25.97% rise. CrowdStrike rose 21.51%, Astera Labs gained 20.00%, and Micron added 18.32%. AMD climbed 13.00%, Marvell Technology gained 12.18%, and Intel rose 11.41%.
Amazon jumps on earnings, Apple due to report
After the close, Amazon topped earnings expectations, sending its shares up more than 13% in after-hours trading. Apple was scheduled to report shortly after, setting up another potentially market-moving event to cap an eventful day.
Source: Investinglive RSS Breaking News Feed
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