Stock Indexes Finish Sharply Higher on AI Demand Optimism
The S&P 500 Index ($SPX) (SPY) closed up +1.31% on Wednesday, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.49%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +2.28%. December E-mini S&P futures (ESZ26) rose +1.33%, and December E-mini Nasdaq futures (NQZ26) rose +2.29%.
US stock indices settled sharply higher on Wednesday. Chipmakers and AI-infrastructure stocks surged, leading the broader market higher after AI cloud computing provider CoreWeave posted strong earnings and raised its annual revenue forecast, easing fears about its debt-laden business. Also, further evidence of strong AI demand came from OpenAI, whose quarterly revenue hit $10 billion for the first time. In addition, stocks rallied as robust demand for Anthropic’s initial public offering has boosted market sentiment.
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On the negative side, crude oil prices rose +0.57% on Wednesday after a senior Iranian official ruled out his country giving up enriched uranium, a sign that the US and Iran remain far apart from a peace deal. Also, Dec T-notes fell to a 1.5-week low on expectations for tighter Fed policy. Market activity was lighter than normal Wednesday, as there was no cash Treasury trading with banks closed for the Veterans Day holiday.
US MBA mortgage applications rose +6.2% in the week ended November 6, with the purchase mortgage sub-index up +7.5% and the refinancing mortgage sub-index up +4.5%. The average 30-year fixed-rate mortgage fell -9 bp to 7.21% from 7.30% in the prior week.
Dec WTI crude oil prices (CLZ26) closed up +0.57% Wednesday after Iranian Secretary of the Supreme National Security Council member Mohsen Rezaee ruled out his country giving up enriched uranium, a sign that the US and Iran remain far from agreeing to a peace deal. He added that any US attack against Iran would trigger strikes on US military bases and that ending the war on all fronts, including in Lebanon, is a key condition for talks with the US. Iran continues to assault ships going through the Strait of Hormuz, and the US has twice launched limited strikes on Iran’s Qeshm Island since early last week. Also, risks to Middle Eastern energy infrastructure persist after Saudi Arabia’s East-West pipeline was targeted Monday in the Medina region, and western Saudi Arabia was targeted by missiles on Wednesday by Houthi Rebels.
Crude prices tumbled to a 2.5-month low Tuesday on optimism about de-escalation in the war with Iran. Qatar’s Foreign Ministry said there have been “positive responses” from the US and Iran to ongoing mediation efforts.
Stocks are supported by the prospect of solid quarterly earnings. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +31% from a year earlier, up from a July estimate of 22%. As of Wednesday, 450 of the S&P 500 companies have reported results, with 84% beating estimates.
Overseas stock markets settled higher on Wednesday. The Euro Stoxx 50 rallied to a 2-month high and closed up +1.04%. China’s Shanghai Composite closed up +0.46%. Japan’s Nikkei-225 Stock Average closed up +1.31%.
Interest Rates
December 10-year T-notes (ZNZ6) closed down -7 ticks on Wednesday. There was no trading in the cash Treasury market on Wednesday, as banks were closed for the Veterans Day holiday. Dec T-note futures tumbled to a 1.5-week low Wednesday and are under pressure from strength in WTI crude oil prices, which boosted inflation expectations. Also, Wednesday’s sharp stock rally has reduced safe-haven demand for T-notes. In addition, T-notes are weighed down by expectations of tighter Fed policy after Tuesday’s US Oct CPI rose more than expected, and after several Fed members expressed support for additional Fed interest rate increases.
The markets are now pricing in a 100% chance of a +25 bp rate hike at the FOMC’s next meeting on December 8-9.
European government bond yields moved lower on Wednesday. The 10-year German bund yield fell -0.3 bp to 3.316%. The 10-year UK gilt yield fell -0.1 bp to 5.222%.
Italy’s September industrial production rose +1.2% m/m, stronger than expectations of +0.7% m/m and the largest increase in 10 months.
The markets are now pricing in a 95% chance of a +25 bp rate hike at the ECB’s next policy meeting on December 17.
US Stock Movers
CoreWeave (CRWV) closed up more than +24% to lead AI cloud-computing stocks higher and gainers in the Nasdaq 100 after reporting Q3 revenue of $3.66 billion, stronger than the consensus of $3.56 billion, and raising its full-year revenue forecast to $13.0 billion to $13.3 billion from a previous forecast of $12 billion to $13 billion, above the consensus of $12.86 billion. Also, Nebius Group NV (NBIS) closed up more than +15%, and Lumentum Holdings (LITE) closed up more than +10%. In addition, Oracle (ORCL) closed up more than +8%, Applied Digital (APLD) closed up more than 7%, and Arista Networks (ANET) closed up more than +6%.
Chipmakers and AI-infrastructure stocks rallied sharply on Wednesday on signs of strong AI demand after OpenAI posted quarterly revenue above $10 billion for the first time. Sandisk (SNDK) closed up more than +13% to lead gainers in the S&P 500, and Micron Technology (MU) and ARM Holdings Plc (ARM) closed up more than +11%. Also, Seagate Technology Holdings Plc (STX) closed up more than +10%, and Marvell Technology (MRVL) closed up more than +9%. In addition, Western Digital (WDC) closed up more than +8%, and Intel (INTC) and Advanced Micro Devices (AMD) closed up more than +7%. Finally, Lam Research (LRCX) closed up more than +6%, and Applied Materials (AMAT) and KLA Corp (KLAC) closed up more than +5%.
Cryptocurrency-exposed stocks moved higher Wednesday after Bitcoin (^BTCUSD) rose more than +1%. Galaxy Digital Holdings (GLXY) closed up more than +13%, and BitMine Immersion Technologies (BMNR) and Bullish (BLSH) closed up more than +6%. Also, Iren Ltd (IREN) closed up more than +5%, and MARA Holdings (MARA) and Robinhood Markets (HOOD) closed up more than +4%. In addition, Coinbase Global (COIN) and Circle Internet Group (CRCL) closed up more than +3%, and Strategy (MSTR) closed up more than +1%.
Corning (GLW) closed up more than +7% after Jefferies initiated coverage on the stock with a recommendation of buy and a price target of $134.
Mercury Systems (MRCY) closed up more than +6% after reporting Q1 adjusted EPS of 52 cents, well above the consensus of 29 cents.
BrightView Holdings (BV) closed down more than -13% after forecasting 2027 revenue of $2.54 billion to $2.72 billion, weaker than the consensus of $2.76 billion.
Hagerty (HGTY) closed down more than -4% after founding family holders offered 9 million shares of the company’s stock between $14.85 and $15.55 each, below Tuesday’s closing price of $16.94.
Phreesia (PHR) closed down more than -2% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $13.
Space Exploration Technologies (SPCX) closed down more than 2% on speculation that the Democratically controlled Congress will limit the funding for President Trump’s Golden Dome program, for which SpaceX is a major contractor.
Earnings Reports (11/12/2026)
Almonty Industries Inc (ALM), Applied Materials Inc (AMAT), Arrowhead Pharmaceuticals Inc (ARWR), Ascendis Pharma A/S (ASND), Cisco Systems Inc (CSCO), DPC Holdings PLC (DPC), Fermi Inc (FRMI), Figure Technology Solutions Inc (FIGR), Forgent Power Solutions Inc (FPS), Mobility Global Inc (MBGL), NIQ Global Intelligence Plc (NIQ), NU Holdings Ltd/Cayman Islands (NU), Solv Energy Inc (MWH), X-Energy Inc (XE), YETI Holdings Inc (YETI).
On the date of publication, Rich Asplund did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com