AI stocks lead a rebound on Wall Street as European markets drop
following protests
[October 20, 2026] By
STAN CHOE
NEW YORK (AP) — Stocks in the artificial-intelligence industry bounced
back on Wall Street Monday and recovered some of their steep losses from
last week, but the rest of the market and stocks worldwide were shaky.
The S&P 500 rose 0.4%, coming off its worst week since June, and the
Nasdaq composite rallied 1.1% because it’s full of technology stocks.
The majority of U.S. stocks outside of AI and tech fell, though, and the
Dow Jones Industrial Average swung between losses and gains before
finishing with a drop of 36 points, or 0.1%.
In Europe, the losses were sharper, and indexes slid more than 1%
following violent protests that could ultimately force the French
government to increase its spending to ease voters’ anger. That in turn
could put even more pressure on bond markets, and yields cranked higher
worldwide.
Even with all the cross currents flowing through financial markets, AI
stocks stood out, as they have for most of the past few years. A frenzy
in spending for AI technology has forced them to the forefront of the
market, sending them to record prices and driving indexes higher. Last
week, AI stocks grabbed the spotlight after tumbling on worries about
how expensive it has become to borrow money, which could threaten the
boom.
Much of the spending on AI chips and data centers has come from borrowed
money, and Treasury yields in the bond market have recently hit their
highest levels in years or even decades. That has raised the cost of
borrowing money for everyone.
Nvidia added 1.4% Monday and was one of the strongest forces lifting the
S&P 500. Because it’s the largest stock on Wall Street by total market
value, a 1% move for its stock has more effect on the index than any
other’s.
SpaceX, which controls the xAI business, rose 1.3% to $147.96. Its
founder, Elon Musk, pledged on Monday to give one share of SpaceX to
“every kid in America” next year. The offer came after Anthropic said
over the weekend that it will commit 5% of the shares in its highly
anticipated initial public offering of stock to a new “public benefit”
fund.
The moves for AI stocks were still choppy, though. Consider CoreWeave, a
company that’s borrowed to buy AI chips that it rents out to customers
over the cloud and has been at the center of the market’s swings. After
initially jumping more than 7% in the morning, it flipped to a loss of
3.5% before finishing with a dip of 0.4%. That followed its loss last
week of 25.2%.
The swings came ahead of profit reports coming later in the week that
could offer more details about the strength of AI-related spending.
Meta Platforms, which is pushing its Muse AI agent, will report its
latest quarterly results on Wednesday. Lam Research, which supplies
equipment and services for the making of semiconductors, will also talk
about how its business is doing on Wednesday.
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A general view of the New York Stock Exchange is seen, Aug. 7, 2026,
in New York. (AP Photo/Yuki Iwamura, File)
 Expectations are high across the
board for U.S. companies’ profits from the summer. Analysts are
forecasting overall growth of 29% for companies in the S&P 500 from
the prior summer, according to FactSet. Those high expectations are
what has allowed the U.S. stock market to run to records despite
worries about war, high inflation and pressure from the bond market.
Cleveland-Cliffs rallied 16.3% after reporting a bigger profit for
the latest quarter than analysts expected. CEO Lourenco Goncalves
said it was the strongest quarter for the company in three years and
that the outlook for profit in 2027 “has improved materially” from
three months ago.
All told, the S&P 500 rose 31.29 points to 7,690.73. The Dow Jones
Industrial Average dipped 36.38 to 51,966.03, and the Nasdaq
composite rallied 290.85 to 26,430.89.
In stock markets abroad, rebounds for AI stocks helped South Korea’s
Kospi jump 1.8% to recover some of its 14.5% drop from last week. It
is dominated by two huge players in the AI industry, Samsung
Electronics and SK Hynix, which has made it much jumpier than other
markets.
In Europe, bond yields climbed following the French protests against
the rising cost of living and poor school conditions. The protests
could put pressure on governments to boost their spending to offer
help, but that would likely only add to their already big piles of
debt.
Yields rose for French bonds on worries about the government’s
already strained budget and climbed much more than yields for German
government bonds, which investors have historically seen as a safer
bet.
In the U.S. bond market, the yield on the 10-year Treasury climbed
to 5.14% from 5.09% late Friday. It topped 5.30% earlier this month
and touched its highest level since 2002.
Oil prices remained shaky. The price for a barrel of Brent crude,
the international standard, swung between $107 and $110 through the
day before settling at $109.55, down 0.3%.
It has been yo-yoing between $97 and $110 this month on uncertainty
about when the war with Iran will allow the energy industry to
return to normal.
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AP Business Writer Chan Ho-him contributed to this report.
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