By Utkarsh Hathi and Tharuniyaa Lakshmi
Nov 11 (Reuters) – The main US indexes were on track to open higher on Wednesday after neocloud firm CoreWeave’s strong earnings assuaged investor worries about bloated AI expenditure.
CoreWeave’s shares jumped more than 15.6% in premarket trading after the battered company said it would become profitable in the first half of 2028 on an adjusted basis, as it sought to reassure investors that strong demand and customer commitments could support its debt-fueled expansion.
“CoreWeave was emblematic of the shift from viewing all AI investments as good investments to taking a more sober look at the returns on the billions of dollars being spent on AI. The earnings report helped ease some of those concerns,” said Steve Sosnick, chief market analyst at Interactive Brokers.
The results boosted sentiment across AI infrastructure stocks, with Nebius Group and Applied Digital rising 13.9% and 10.1%, respectively, before the bell.
Equities have faced a tug of war this week, with concerns over slower data center deployment, higher interest rates and Nvidia’s troubles clashing with renewed interest in beaten-down AI stocks.
At 08:26 a.m. ET, Dow E-minis rose 153 points, or 0.29%, S&P 500 E-minis were up 72.75 points, or 0.96%, and Nasdaq 100 E-minis gained 547.75 points, or 1.98%.
Nvidia jumped 3.7% in premarket trading after shedding about $430 billion in the last two sessions as questions about CEO Jensen Huang’s relationship with a businesswoman alleged to be a Chinese spy roiled markets.
Other chipmakers also rebounded, with Marvell Technology and Micron up 9.1% and 7.4%, respectively.
Data storage firms Seagate Technology and Western Digital were among the top S&P 500 gainers, rising 9.5% and 8.6%, respectively.
Investors also examined the terms set by Anthropic on Tuesday for its blockbuster initial public offering. The Claude chatbot creator is aiming for a valuation of up to $1.4 trillion in the share sale.
RATE FEARS LINGER
Hotter-than-expected inflation data on Tuesday reinforced expectations that the US Federal Reserve would raise interest rates next month. US consumer prices increased more than expected in October amid higher food and accommodation costs, data showed.
The central bank should consider raising borrowing costs by 50 basis points if October inflation worsened, Fed Governor Christopher Waller said before the CPI report. A tamer approach risks hurting the Fed’s inflation-fighting credibility, he said.
Traders see a hike next month as a certainty, with an 11.5% chance of a half-percentage-point increase, according to the CME FedWatch tool.
“While a December rate hike now appears almost fully priced in, the bigger concern is that investors may have underestimated how much further the Fed will need to tighten,” said Daniela Hathorn, senior market analyst at Capital.com.
Meanwhile, oil prices climbed more than 1% from the previous session’s two-month lows, after Iran’s security chief said Tehran would not allow enriched nuclear material to leave the country.
The US bond market is shut on Wednesday for Veterans Day.
(Reporting by Niket Nishant, Utkarsh Hathi and Tharuniyaa Lakshmi in Bengaluru; Editing by Shinjini Ganguli and Pooja Desai)
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