Nasdaq 100 rebounds sharply as AI stocks recover from last week's sell-off

what happened

The Nasdaq 100 gained 1.2% on Monday, its strongest session in almost four weeks, as buyers returned to AI-linked shares after a week of heavy losses in infrastructure names. The S&P 500 rose 0.4%, the Dow Jones Industrial Average edged down 0.1%, and the Russell 2000 closed 0.3% higher, according to Stocktwits.

Chipmakers led the rebound, with the Philadelphia Semiconductor Index climbing about 1.6% and Micron, Nvidia and Broadcom among the gainers. Amazon shares jumped nearly 5% after Morgan Stanley reaffirmed its 'Overweight' rating and raised its price target. Over the prior week the Nasdaq had dropped 4.5% and the S&P 500 nearly 2%.

Attention now shifts to Meta and Tesla earnings later this week, which investors will use to judge whether AI spending is paying off. The same source reports that bond investors have been stepping back from CoreWeave, and the cost of insuring its debt against default has surged, adding to unease.

why it matters

The key takeaway for markets is that the AI sell-off appears to be easing, but investors remain sensitive to any sign that heavy capital spending is not yet matched by revenue. Stocktwits data shows retail sentiment on QQQ improving to neutral, while sentiment on SPY and DIA remains bearish.

market impact

Tech and AI stocks: the relief rally lifts Nasdaq 100 and chip names, while CoreWeave and AI infrastructure stay under pressure

instruments