Wall Street Rebounds After Bruising Week, Sparking Dead-Cat Bounce Debate
Key Takeaways
- •Memory-chip stocks led Friday's advance, with Micron, Intel, SanDisk, Nvidia and Qualcomm among notable gainers after early bounces of roughly 10%, though major indexes closed below their session highs.
- •The S&P 500 posted a 2.7% weekly loss, its worst performance since April 2025, while the Nasdaq fell 3.4% for a fourth consecutive week of declines.
- •A report that Microsoft will curb third-party data centers briefly sent Oracle down 3% and pressured the Nasdaq during the session.
- •Strong nonfarm payrolls data may put a rate-hiking cycle back on the table, a particular risk for chip and AI-linked stocks whose valuations rest on earnings projected far into the future.
- •The Financial Times reported after the close that Anthropic will proceed with an IPO at a valuation of $1.25 trillion to $1.75 trillion, a scale that would rank among the largest on record.
US stock markets started the session strongly on Friday, with beaten-down memory-chip names staging bounces of roughly 10% before the gains moderated. The early momentum faded, but the market did not break down.
Among the notable movers, Micron (MU) rose 5.1%, SanDisk (SNDK) gained 3.5%, Intel (INTC) jumped 7.7%, SKHY added 2.8%, Nvidia (NVDA) advanced 2.8% and Qualcomm (QCOM) climbed 5.8%. The hyperscalers — the largest cloud-computing operators — finished near flat, and while the major indexes ended higher, they failed to hold their session highs.
The session was framed as a decent day that followed a brutal rout, with neither the bulls nor the bears able to claim a clear victory. The open question — a genuine rebound or a "dead-cat bounce," trader shorthand for a short-lived rally in a falling market that fades as sellers return — is what makes how the session resolved worth watching. Enthusiasm may have been limited by the nonfarm payrolls report — the U.S. Labor Department's monthly gauge of hiring — because it puts a rate-hiking cycle back on the table, according to the analysis. Strong employment readings typically reinforce expectations that the Federal Reserve will keep monetary policy tighter for longer, and rate expectations matter for chip and AI-linked names in particular, whose valuations rest on earnings projected far into the future.
Weighing on the market at one point was a report of a strategy shift at Microsoft (MSFT), under which the company will curb third-party data centers, with Oracle cited. Both companies rank among the largest operators of data-center capacity serving cloud and AI workloads. The news briefly sent Oracle (ORCL) down 3% and pressured the Nasdaq.
Overall, it was a difficult week for stocks, though the pain was concentrated heavily in just a handful of names — the same beaten-down memory-chip group that led Friday's bounce.
On the day:
- S&P 500: +0.3%
- Nasdaq Composite: +1.1%
- Russell 2000: +1.0%
- Dow Jones Industrial Average: -0.4%
On the week:
- S&P 500: -2.7% — worst weekly performance since April 2025
- Nasdaq Composite: -3.4% — a fourth week of declines
- Dow Jones Industrial Average: -0.9%
Just after the close, the Financial Times reported that Anthropic, an AI developer, will go ahead with its initial public offering at a valuation of $1.25 trillion to $1.75 trillion — likely $1.5 trillion, a scale that would rank among the largest IPO valuations on record.
Attention remains on Iran, but positive headlines faded quickly during the session. In the author's assessment, that suggests some optimism is already priced into the market, which now needs to see something official before moving further. Until that confirmation arrives, the near-term picture rests on follow-through: whether the memory-chip bounce holds, how rate expectations evolve after the payrolls print, and whether the reported Anthropic IPO and Iran headlines are made official.
Source: InvestingLive
