Nasdaq closes higher as AI stocks rebound before US midterm results

what happened

The Nasdaq finished higher on Tuesday as large AI-linked technology companies recovered ground ahead of the US midterm vote. The index gained 0.83% to 25,372.01 points. The S&P 500 rose 0.36% to 7,568.92 points, while the Dow Jones Industrial Average slipped 0.38% to 51,787.04 points, Reuters reported.

Apple shares fell 1.9% after the company said memory chip prices would keep rising and squeeze its gross margin in the holiday quarter. Micron advanced 2.6%, and Nvidia added 2.3% after four sessions of losses. Gartner plunged 13.2%, Thomson Reuters lost 9.9% and Shopify dropped 8.7%, all three after releasing quarterly results.

The Nasdaq 100 closed Monday more than 10% below its October 6 record, confirming a correction driven by fears that spending on AI infrastructure is running ahead of cash generation. Polls and nonpartisan analysts expected Democrats to take control of the House from Republicans. Trading volume on US exchanges came to 16.6 billion shares, below the 17.4 billion average of the prior 20 sessions.

why it matters

Money moving from relatively defensive names such as Apple into riskier chipmakers suggests investors are buying dips in AI-linked stocks, while still watching how much companies spend on AI. Morgan Stanley believes the correction that began in June is nearing its end, and that the election outcome should clear a major overhang tied to taxation and government spending.

market impact

Nasdaq 100 and chipmakers: the AI rebound supports the tech index; Apple: its cost warning pressures margins.

• ▲Nasdaq 100 pressure up — rebound in AI companies and chipmaker buying after the correction
• ▼Apple shares pressure down — memory cost warning pressures the gross margin outlook

tags

instruments