Wall Street rebounded sharply on Wednesday, 11 November, as strong results from AI cloud provider CoreWeave revived confidence in the artificial intelligence trade and pulled technology stocks higher after Tuesday's inflation-driven sell-off.

The Nasdaq Composite closed 1.60% higher at 25,466.19, the S&P 500 rose 1.31% to 7,619.38, and the Dow Jones Industrial Average added 0.49%, or 254.60 points, to 52,486.49. The rally reversed Tuesday's losses, when all three benchmarks fell after October consumer prices rose faster than expected.

CoreWeave was the day's standout. The stock soared about 25% after the company reported third-quarter revenue of $3.7 billion, more than double the $1.4 billion it recorded a year earlier, and raised its full-year revenue guidance. The results reassured investors who had worried that heavy spending on AI infrastructure was outrunning real demand.

Nvidia, the chipmaker at the centre of the AI boom, gained 2.87% to close at $173.73, recovering some of the ground lost over the previous two sessions, when the shares fell about 10%. Trading in Nvidia was heavy, with 266.6 million shares changing hands, more than double its three-month daily average. The company reports quarterly results on 17 November, an event investors see as the next big test for the AI trade.

The gains ran well beyond Nvidia. Memory chipmaker Micron jumped 12%, South Korea's SK Hynix rose 10%, and the iShares Semiconductor ETF climbed 6%. Advanced Micro Devices surged 7.32% to $552.90, Broadcom added about 4%, and Intel rose 7.5%. SanDisk jumped 14% to lead gainers in the S&P 500, while Dell gained 12% and Oracle surged 9%.

The rebound came a day after a hotter-than-expected inflation report rattled markets. October consumer prices rose 0.4% on the month, against forecasts of 0.3%, while core prices, which strip out food and energy, rose 0.3% against forecasts of 0.2%. Traders now price in a roughly 90% chance that the Federal Reserve will raise interest rates at its 8-9 December meeting.

The bond market offered no counterweight on Wednesday: it was closed for Veterans Day, leaving the 10-year Treasury yield frozen near 4.98% after briefly topping 5% on Tuesday. That left the rally resting entirely on earnings, and the test will come when bond trading resumes and investors re-price the December rate decision.

In other markets, West Texas Intermediate crude futures were up 0.4% at about $86.40 a barrel, gold futures fell 1% to about $3,990 an ounce, and bitcoin traded at about $74,600.

Sources: Investopedia and The Motley Fool.