Stocks recover as AI shares rebound after selloff, investors stay wary

For retirement savers and index-fund holders, Thursday’s rebound was less a relief rally than a reminder of how sharply a handful of AI stocks can swing the whole market. The S&P 500 rose 0.3% in early trading, the Dow Jones Industrial Average gained 245 points and the Nasdaq composite added 0.3%, after a day in which another selloff in artificial-intelligence shares had dragged Wall Street lower.

The recovery followed a bruising session that left the S&P 500 down 1.62% at 7,266.99 and the Nasdaq Composite off 1.98% at 25,169.50. Chipmakers had been at the center of the move, and Thursday’s premarket trading showed how quickly sentiment shifted back: Nvidia, Intel and Micron Technology were all higher, with Micron among the names trying to regain footing after a rough stretch. The Philadelphia Semiconductor Index had already rebounded strongly in the previous session, underscoring how much of this week’s market action has turned on a narrow group of technology shares.

The question hanging over the bounce was whether the AI trade had merely been reset or whether investors were seeing the start of a deeper correction. Reuters said the prior day’s selloff pushed major Wall Street indexes down more than 1% and sent technology stocks into correction territory, defined as a 10% drop from a record close. That has raised the stakes for every new trading session, because gains in the biggest chip and AI names still have an outsized effect on the broader averages.

The market’s unease went beyond technology. Oil prices edged lower in early trading as investors weighed the conflict between the United States and Iran, including a second round of U.S. airstrikes and the risk that higher energy costs could keep inflation pressures elevated. Brent crude fell to about $92.20 a barrel, while the Strait of Hormuz remained effectively shut to oil tankers, blocking shipments from the Persian Gulf from reaching customers worldwide. Treasury yields were relatively steady even as traders watched for signs of progress in U.S.-Iran peace talks.

Another layer of caution came from the calendar. Investors were also looking ahead to a wave of high-profile public-market deals, including the possibility that SpaceX could come to market, a prospect that could draw cash away from existing megacap stocks and add to the churn. For now, the day’s rebound showed how fast bargain-hunting can return after a selloff, but it did not resolve the larger debate over whether the AI boom is still powering higher or beginning to show the first signs of strain.