The Nasdaq AI rebound put the index back in positive territory on Tuesday, but the gains were uneven. The S&P 500 climbed 0.36% to 7,568.92 points, while the Dow Jones Industrial Average declined 0.38% to 51,787.04 points.
What Drove the Nasdaq AI Rebound on Tuesday?
Micron Technology gained 2.6%, while Nvidia rose 2.3% after falling in the last four sessions. The broader Philadelphia chips index jumped, and AMD rose ahead of its quarterly report due after the bell.
Microsoft and Amazon each moved more than 2% higher. Jay Hatfield, chief executive officer at Infrastructure Capital Management, called it “a rotation from safe tech, like Apple, into riskier tech, like chipmakers.”
Why Is the Nasdaq 100 in a Correction?
The Nasdaq 100 ended Monday more than 10% below its October 6 record-high close, confirming a correction. Investors worry that massive AI infrastructure spending is outpacing near-term cash generation.
Amazon and Alphabet fell sharply last week after their quarterly results deepened concerns about the cost of heavy AI spending. The S&P 500 is down about 3% from its October 6 record-high close, yet it remains up over 10% in 2026.
How Did Apple’s Results Weigh on the Nasdaq?
Apple dropped 1.9% after warning that memory-chip costs would keep rising, pressuring its holiday-quarter gross margin. The iPhone maker joined a list of Big Tech companies whose quarterly results failed to impress investors.
Palantir Technologies forecast revenue above estimates for the last three months of the year after topping third-quarter expectations, yet its shares dipped. Gartner dropped 13.2%, while Thomson Reuters and Shopify fell 9.9% and 8.7%, respectively, after reporting quarterly results.
Will the Midterm Elections End the Market Overhang?
American voters will deliver a verdict on the first two years of President Donald Trump’s second term in Tuesday’s midterm elections. Polls and nonpartisan analysts favour Democrats to wrest the House from Republicans, while control of the Senate remains uncertain.
Ken Mahoney, CEO of Mahoney Asset Management, said markets will assess implications for fiscal policy, regulation, taxation and government spending. Morgan Stanley analysts said in a note that the elections should help remove a major market overhang, and they believe a US market correction that began in June is in its “final innings.”
Oil prices eased as investors weighed talks to end the wars in Ukraine and Iran. A senior Iranian official told Reuters that Iran and the United States are still far from a deal to end their war.
Is the Nasdaq AI Rebound Broad-Based?
The breadth data points to a narrow recovery. Declining stocks outnumbered rising ones within the S&P 500 by a 1.6-to-one ratio.
- Six of the 11 S&P 500 sector indices declined.
- Consumer staples led losses with a 1.76% drop, followed by a 1.75% fall in materials.
- The S&P 500 recorded 10 new highs and one new low.
- The Nasdaq recorded 57 new highs and 251 new lows.
- US exchange volume was 16.6 billion shares, versus a 17.4 billion average over the previous 20 sessions.
Why Should Bursa Malaysia Investors Track This Nasdaq Move?
The report covers US-listed names only, so the direct read-across to Bursa Malaysia is limited. Still, the split between AI hardware and Big Tech earnings is worth monitoring if you hold regional technology or semiconductor-linked exposure. You can review AI-driven tools in our guide to AI Stock Analysis for Malaysians.
Key Takeaways
- The Nasdaq rose 0.83% to 25,372.01 points on Tuesday.
- The Nasdaq 100 remains more than 10% below its October 6 record-high close.
- Apple fell 1.9% after warning of higher memory-chip costs.
- Morgan Stanley analysts said the US correction that began in June is in its “final innings.”
- Decliners outnumbered advancers in the S&P 500 by a 1.6-to-one ratio.
Frequently Asked Questions
How much did the Nasdaq gain on Tuesday?
The Nasdaq gained 0.83% to end the session at 25,372.01 points. The S&P 500 climbed 0.36% to 7,568.92 points on the same day.
Why is the Nasdaq 100 in a correction?
The Nasdaq 100 ended Monday more than 10% below its October 6 record-high close. Investors worry that massive AI infrastructure investments are outpacing near-term cash generation.
Why did Apple shares fall?
Apple dropped 1.9% after warning that memory-chip costs would continue to rise, pressuring its holiday-quarter gross margin. The company joined other Big Tech firms whose quarterly results failed to impress investors.
What did Morgan Stanley say about the US market correction?
Morgan Stanley analysts said the elections should help remove a major market overhang. They believe the US market correction that began in June is in its “final innings.”
Disclaimer: This article is for general information only and does not constitute investment advice. Always do your own research before making any investment decision.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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