Dow jumps 556 pts while Nvidia keeps bleeding, our AI spotted the pivot weeks ago
On Wednesday, Wall Street diverged from the norm and started running away from anything labeled "AI," according to Investing.com. The Dow Jones Industrial Average surged by 556.21 points (+1.08%) to reach 52,177.69, the S&P 500 gained 0.33% to close at 7,744.06, while the Nasdaq Composite only managed a 0.08% increase after an intraday drop of up to 1.4%.
Nvidia's stock, however, fell from an earlier 3.8% loss to a 1.8% loss by the close. Investing.com's ProPicks AI, which is available through InvestingPro, lists the full selection of October picks in real time. Investors were wary of how the AI industry's trillion-dollar data-center spending binge would be financed, leading to CoreWeave's credit default swaps soaring to imply a roughly 60% chance of default within five years.
This events triggered a shift out of chips and into more stable sectors like blue-chip industrials, healthcare, and consumer staples. Our AI-powered stock-picking models have been favoring such sectors for months, as evidenced by Dominate the Dow, a strategy that ranks the 30 Dow components each month and has been up 19.1% for the year, outperforming the broader market.
UnitedHealth, Amgen, Microsoft, and McDonald's also performed well this month, outpacing the market. The broader market trends echoed this shift, with the equal-weighted S&P 500 outperforming the market-cap-weighted version by 1.4%. Healthcare stocks led the charge, with their sector opening at an intraday record as money moved from chipmakers to hospital operators and insurers.
The equal-weighted S&P 500 even outperformed the market-cap-weighted version, and money flowed into banks, consumer names, and healthcare as yields on 10-year Treasuries dropped to 5.09%, reflecting safe-haven demand. Consumer staples, which surged over 2% on the day, are up nearly 9% for October, while retail-sector ETFs have gained more than 3%, and homebuilders like Lennar have rallied over 5% due to expectations of mortgage relief.
Written by urgent.news from Investing.com's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
