Wall Street bounced back on Wednesday 11 November, with the Nasdaq Composite leading a sharp recovery in chip stocks a day after hotter-than-expected inflation data sent all three major indexes lower.

The Nasdaq Composite climbed 2.06% on the session to 25,583.42, taking its gain for the week to 4.08%, while the S&P 500 added 1.4% on the day to 7,626.55. The Dow Jones Industrial Average rose 2.05% over the same weekly stretch, and the small-cap Russell 2000 gained 0.81% on the day to 2,844.20.

CoreWeave results revive the AI trade

The rally was powered by AI cloud provider CoreWeave, whose third-quarter results beat expectations and eased fears about the artificial intelligence boom. CoreWeave reported revenue of $3.66 billion, up 168.3% from a year earlier and ahead of analyst estimates of $3.54 billion.

Nvidia also recovered after two sessions of losses, while Intel rose sharply, as investors bought back into semiconductor names that had been sold off on Tuesday.

Tuesday's inflation shock

The rebound followed a bruising Tuesday, when the Dow fell 0.30% to 52,231.89, the S&P 500 lost 0.38% to 7,520.93 and the Nasdaq dropped 0.74% to 25,065.87. October consumer prices rose 0.4% month on month, above the 0.3% economists had expected, pushing traders to price in a December interest-rate rise.

Markets now put the chance of a quarter-point Federal Reserve increase in December at about 87%, according to the CME FedWatch tool. The US bond market was closed on Wednesday for Veterans Day, leaving equities to trade without fresh guidance from Treasury yields.

Oil also rose, with Brent crude up 2.01% to $93.25 a barrel and US West Texas Intermediate up 1.21% to $87.08.