Tuesday afternoon saw a modest rally in U.S. technology equities after a brief panic over artificial-intelligence expenditures. The broad S&P 500 index closed 0.37 percent higher, while the Nasdaq Composite added 0.83 percent. In contrast, the Dow Jones Industrial Average slipped 0.38 percent, pressured by a 1.9 percent fall in Apple shares after the company issued a weaker-than-expected margin outlook tied to rising memory-chip costs.
Chip manufacturers led the upside, with Nvidia posting a 2.3 percent gain after four consecutive sessions of decline. Fellow semiconductor players Advanced Micro Devices, Broadcom and Micron Technology also posted notable jumps, reinforcing the sector’s resilience despite recent volatility. Analysts noted that the rebound reflected continued investor confidence in the demand for high-performance computing hardware that underpins AI models.
The rally capped a short-lived sell-off that began the previous week, during which the Nasdaq suffered its steepest monthly slide since March 2025. By Monday the index had slipped into correction territory, trailing 10 percent from its October 6 record close, prompting heightened caution among traders. The downturn was largely attributed to concerns that corporate budgets for AI projects might outpace revenue growth.
Energy markets also provided modest relief, as Brent crude fell to $103 a barrel on Tuesday, down from $117 at the end of October. The dip, linked to tentative negotiations involving Iran and Russia, helped ease pressure on risk-off sentiment across equity markets. Investors interpreted the lower oil price as a signal that inflationary pressures could moderate, supporting a more favorable environment for growth stocks.
Despite the turbulence, year-to-date performance remains strong, with the S&P 500 up roughly 10 percent, the Nasdaq about 9 percent and the Dow near 7 percent. Market participants are watching the midterm elections, expecting Democrats to secure a House majority and possibly gain Senate seats, which could introduce additional AI regulatory measures. Historical data compiled by CNBC indicates that U.S. equities typically rebound after elections, as uncertainty fades and investors adjust to the new political landscape.