Wall Street Highlights: Chip Stocks Rally As Bonds Fall On US Election Day

Chipmakers halted a selloff that had been fueled by worries the AI spending spree is becoming harder to justify. The rebound lifted the S&P 500 even as most of its firms fell. In late hours, Advanced Micro Devices Inc. and Super Micro Computer Inc. gave strong forecasts. Oil prices eased. But that wasn't enough to lift Treasuries amid solid job openings data.

Millions of Americans across the country are casting ballots in races Tuesday that will determine local issues as well as control of Congress. The first polls close at 6 p.m. Eastern time.

"Tuesday's elections could reshape the balance of power in Washington," said Ken Mahoney at Mahoney Asset Management. "This will be good to put behind us as it has been an anticipated volatility event for quite some time."

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Since 1950, the S&P 500 has never been lower 12 months after a midterm election, noted Tom Essaye at The Sevens Report.

"The results could act as a clearing event removing some uncertainty, though developments around the AI theme and geopolitics are the primary forces driving markets heading into the final two months of the year," said Angelo Kourkafas at Edward Jones.

November has historically been a favorable month for equities, but the recent tech weakness has raised questions about market leadership, Mahoney noted.

At Edward Jones, Brian Therien said the recent market rotation represented less of a rejection of AI's potential than a reassessment of the price that investors are willing to pay for it.

"Markets still assign premium valuations to companies that demonstrate strong demand, rising AI-related revenue, and the ability to fund additional investment internally," he said. "We continue to recommend an overweight allocation to equities, with a preference for US large- and mid-cap stocks, due in part to the relative strength of the US economy."

Apollo Global Management Inc. said it plans to take a more defensive approach to its investments tied to AI, as the asset manager plows billions into financing the infrastructure buildout underpinning the technology.

"We know that society will use dramatically more computing power in the future," that demand for chips will remain strong, "and that AI capabilities are improving at an extraordinary rate," Apollo President Jim Zelter said on a call with analysts Tuesday. "What we don't know is how pricing and economics will evolve."

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Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.4% as of 4 p.m. New York time
• The Nasdaq 100 rose 0.7%
• The Dow Jones Industrial Average fell 0.4%
• The MSCI World Index rose 0.1%

Currencies

• The Bloomberg Dollar Spot Index rose 0.3%
• The euro was little changed at $1.1191
• The British pound was little changed at $1.3413
• The Japanese yen fell 0.5% to 158.73 per dollar

Cryptocurrencies

• Bitcoin rose 1.4% to $77,775.18
• Ether rose 1.5% to $2,289.36

Bonds

• The yield on 10-year Treasuries advanced five basis points to 4.96%
• Germany's 10-year yield advanced four basis points to 3.33%
• Britain's 10-year yield advanced seven basis points to 5.26%

Commodities

• West Texas Intermediate crude rose 0.3% to $96.75 a barrel
• Spot gold fell 0.6% to $3,921.22 an ounce