AI Stocks Bounce Back but It’s Nothing to Celebrate

On the anniversary of the 1987 Black Monday stock market crash, many will have been fearing the worst—especially after Friday’s brutal AI selloff.

Instead, the tech gloom has lifted, and the market is staging a comeback.

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The chip sector’s longest losing streak in more than 20 years looks set to finally snap as Intel , Advanced Micro Devices and others enjoy a good start to the week, at least if premarket trading is to be believed. Micron is also getting a boost from its Chinese rival, while stocks exposed to the data-center buildout, such as Bloom Energy , are having an even better time.

But is it just a relief rally? The debt fears that ravaged AI stocks last week haven’t disappeared. CoreWeave plunged 25% last week and it’s up around 2% this morning—it’s not exactly a strong recovery. And things can quickly change, even intraday, as we saw last week.

The dearth of any more bad news has allowed investors to explore buying the dip. The real test of the market’s optimistic turn may come when Meta Platforms reports earnings Wednesday.

Hyperscalers like Meta need to show they are still committed to big spending on AI—or else.

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📈 Here’s what’s happening in markets today:

• Stock futures rebound as tech claws back losses.
• CoreWeave, Sandisk, Marvell, Tesla, SpaceX, and more stocks that explain today’s market.
• Micron stock rallies as China memory chip rival forecasts revenue boom.
• AI stocks rebound. Chip sector’s historic losing streak is set to snap.
• Musk is giving away $10 billion in SpaceX stock—to your kids.
• Cleveland-Cliffs expects 2027 will be a very good year with help from tariffs.

Created with Highcharts 9.0.1Source: FactSetNote: futures contractsAs of Oct. 19, 9 a.m. ET

Created with Highcharts 9.0.1Nasdaq S&P 500Dow industrialsOct. 18Oct. 19-0.50-0.2500.250.500.751.001.251.50%

🎙️ Be sure to tune in to today’s Barron’s Live

Join Barron’s Live today at noon for a deep dive into how a technology investor is assessing AI buildout concerns, competition from China, and which AI heavyweights are still undervalued. Associate Editor Reshma Kapadia speaks with Jonathan Cofsky, portfolio manager on Janus Henderson’s Global Technology and Innovation Team. Sign up here.

Join us on Dec. 10 for discussions with Wall Street strategists and money managers about the outlook for stocks, bonds, interest rates, and policy in the year ahead, and the best ways to navigate an uncertain investment landscape. Sign up here.

🗳️ Wealth taxes are on November’s ballot in several states

November’s ballot box won’t just determine control of Congress. It could also provide a crystal ball for the future of U.S. tax policy. Many Democratic lawmakers are watching California, Washington, and Colorado, where voters are considering whether states can refill their coffers with millionaire and billionaire taxes. Read more here.

🚀 How Blue Origin is maneuvering to compete with SpaceX

SpaceX has sucked up most of the oxygen lately when it comes to commercial space companies, thanks to its blockbuster initial public offering this summer and megabillionaire CEO Elon Musk. But let’s not forget about Blue Origin, which has been quietly laying the groundwork to become a stronger competitor. Read more here.

🏛️ The Fed will raise interest rates more even if it pauses now

Federal Reserve officials appear inclined to keep interest rates unchanged when they meet to decide on policy later this month. But don’t be fooled by a pause: More rate increases are likely coming, possibly as soon as December, to tame escalating inflation. Read more about it here.

📈 Put it on your calendar

Every Monday morning Barron’s publishes a rundown of what’s coming up for investors in the week ahead. Don’t miss out on earnings reports, inflation data, and anything that could move the markets. On the agenda:

• Meta Platforms earnings
• Tesla earnings
• Pending home sales for September

🕶 China is paying people to shop. It’s a boon for tech.

China’s consumer trade-in program had supported 1.55 trillion yuan in sales of eligible goods, according to the National Development and Reform Commission. China is using the consumer subsidies to build markets for technologies it wants to dominate from AI glasses to energy-efficient appliances. Read more about it here.

📰 Don’t miss out on our other newsletters

• Review & Preview: AI Bloodbath
• Retirement: Why COLA Is Still the Best Inflation Protection Around
• Energy Insider: Earnings Preview: 5 Things That Could Move Stocks
• View From the Circle: CoreWeave Just Created an Incredible Opportunity

🍔 Brace your budget: food inflation is about to accelerate

The cost of groceries has been surprisingly stable in recent months, but don’t expect that calm to last. While food inflation has only risen 2.5% over the past 12 months, below the overall pace of 3.7% headline inflation, that is expected to end. Read about why here.

💬 Quote of the day:

I’m better to have partners who are very open and clear than to have those who are killers, even with a smile on their face. — Ukraine President Volodymyr Zelensky

Other headlines moving markets:

• Novartis scraps another drug study. Why the stock is holding up.
• Why it’s too early to panic about Moderna stock.
• Coca-Cola, Visa, Mastercard stocks hit records as investors rotate out of chip stocks.
• DraftKings stock hit by NBA betting crackdown.
• Telsa’s flying Roadster and the SpaceX halo.
• Wall Street is usually optimistic about third-quarter earnings. Here’s why.
• How weight loss drugs could drive the future for Victoria’s Secret.
• Why Fox can finally breathe a sigh of relief on the Roku deal.
• Applied Materials and other chip equipment stocks are down but not out.
• Companies are saying no to tokenized stocks and Wall Street’s crypto push.
• AI fears are rocking markets. Investors should buy the dip.
• HPE’s worst week ever exposes Wall Street’s biggest fear.
• Why the diesel crisis lifting inflation is here to stay.
• What can’t be denied by the AI trade. CoreWeave and Anthropic are clues.

— Edited by Liz Moyer, Stacy Ozol, and Rupert Steiner

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