According to Woofun AI, the New York stock market showed significant divergence, driven by a wave of bargain buying in AI-related technology stocks; the Nasdaq Index rallied strongly due to capital inflows into the semiconductor sector, while the Dow Jones Industrial Average faced downward pressure amid concerns over AI-related debt burdens and rising international oil prices.
On the 19th local time, closing data from major U.S. stock indices revealed this structural divergence. The Dow Jones Industrial Average fell 36.38 points, or 0.07%, closing at 51,966.00; in contrast, the S&P 500 rose 31.29 points, or 0.41%, to 7,690.73. The Nasdaq Composite, led by technology stocks, performed most strongly, rising 290.86 points, or 1.11%, to close at 26,430.90. The Russell 2000 ETF (IWM.US), which reflects the performance of small- and mid-cap stocks, also advanced 0.85 points, or 0.31%, to 271.29.
Notably, although the Nasdaq and S&P 500 rose during the trading session, the Dow Jones index turned lower in after-hours trading, further highlighting the divergent market rebound driven primarily by technology stocks, as weakness in traditional industrial and energy sectors offset gains in tech.
The core driver of this rebound is investors buying undervalued artificial intelligence-related stocks following their earlier sharp declines. Last week, the Nasdaq Index fell 4.5%, ending four consecutive weeks of gains; the S&P 500 also dropped about 2%, marking its largest weekly decline since the end of June. The information technology sector, in particular, declined over 6%, registering its worst weekly performance since April last year. According to Goldman Sachs (GS.US), global hedge funds reduced their exposure to tech stocks at the highest level on record, creating room for the current rebound. Today, the semiconductor sector led the market recovery: Intel (INTC.US) rose approximately 2% after JPMorgan (JPM.US) upgraded its investment rating; AMD (AMD.US) and Micron Technology (MU.US) also gained 1% and 2%, respectively. Among sectors, the consumer discretionary sector rose about 3% during the session, becoming the strongest-performing area; information technology and communication services sectors also advanced, while the utilities sector declined approximately 1.9%, underperforming.
Woofun AI's data shows that this sector rotation reflects a rapid shift of capital from high-valuation tech stocks to defensive sectors and oversold growth stocks.
However, the debt pressures stemming from AI investments persist, and market concerns about the profitability of the AI industry and its financing costs have not been alleviated by the short-term rebound. Despite Goldman Sachs (GS.US) upgrading its investment rating, CoreWeave (CRWV.US), an AI cloud services company, saw its stock price fall by approximately 3%. Last week, the stock plunged more than 25% due to debt concerns, marking its largest weekly decline since November last year, reflecting ongoing investor caution regarding its highly leveraged business model.
Meanwhile, AI company Anthropic reported third-quarter revenue of $16.8 billion, up from $11.6 billion in the second quarter, but questions remain about whether its growth rate can meet expectations. LNW’s Chief Investment Officer, Len Albarah, expects investors to more rigorously assess whether AI companies can generate real returns on investment through increased borrowing. This shift in valuation logic—from “growth first” to “balancing profitability and debt”—is reshaping the entire investment narrative around the AI sector.
Geopolitical risks at the macro level have further intensified market uncertainty. Geopolitical tensions in the Middle East, as well as between Russia and Ukraine, have also pressured stock markets. Repeated attacks on vessels in the Persian Gulf and energy infrastructure have heightened concerns about potential disruptions to crude oil supplies. Brent crude oil prices have risen to around $110 per barrel, while West Texas Intermediate crude prices have increased by approximately 2%, nearing $104. There are fears that rising oil prices could once again exacerbate inflationary pressures and upward pressure on interest rates, forcing the Federal Reserve to maintain high rates for a longer period—directly weighing on overvalued technology stocks. Higher energy costs not only affect corporate operating profits but may also transmit through supply chains to consumers, weakening the recovery momentum in the non-cyclical consumer goods sector.
The market's focus is now shifting to the upcoming earnings reports this week from prominent companies such as Meta (META.US) and Tesla (TSLA.US). The sustainability of the tech stock rebound will become clearer as investors assess whether AI investments are genuinely driving improved profitability. If these giants can demonstrate their ability to convert AI capital expenditures into actual profits, market confidence is likely to strengthen further; conversely, if revenue growth slows or profit margins come under pressure, it could trigger a new wave of selling.