Stocks rise as tech shares rebound following sell-off: Live updates

Stocks rose on Friday, supported by technology stocks, following a losing session in which an underwhelming revenue report from OpenAI took some steam out of the high-flying artificial intelligence trade.

The Nasdaq Composite added 0.6%. The S&P 500 climbed 0.5%, while the Dow Jones Industrial Average traded up 320 points, or 0.6%.

Tech shares broadly were led by a 2% gain in SpaceX. The Elon Musk-led space and satellite company rose on a deal to buy a nationwide spectrum portfolio. Shares of AT&T, Verizon and T-Mobile slid as investors wondered worried the agreement could drive up competition.

Other tech names that advanced on Friday include Lumentum and Oracle, which gained 6% and 5%, respectively. Microsoft shares added 2%, and Palantir Technologies gained 3%.

AI stocks dropped on Thursday after CNBC confirmed that OpenAI told investors that it saw $50 billion in annualized revenue at the end of September. Last month, a $68 billion figure was widely reported, though a person familiar with the matter said it also included gross revenue from partners.

The Nasdaq dropped more than 1%, marking its biggest one-day loss since mid-August. Thursday marked the second down day in a row for the tech-heavy index after it climbed to fresh all-time records earlier in the week.

“The sell-off reflected extreme positioning imbalances that have further to unwind in our view, which is why the whole AI-linked tech stock complex is unlikely to simply stage a sharp, V-shaped rebound,” wrote Adam Crisafulli of Vital Knowledge.

“When it comes to AI, the main issue isn’t the gross vs. net issue with [annualized recurring revenue] but instead: 1) the fact that the standalone frontier labs are increasingly unattractive businesses … and 2) growing signs that markets are pushing back on the tidal wave of AI-linked debt and equity being thrown at them,” he added.

All three major averages are heading for a winning week. The Dow and Nasdaq have risen less than 1% each, while the S&P 500 has gained around 1%.

Next week, earnings season gets into full swing with the banks set to report, as well as other notable names such as Johnson & Johnson and UnitedHealth. Those two are slated to report on Tuesday alongside others like Wells Fargo and Citigroup.

While Michael Monaghan of Founder ETFs is constructive on equities through year-end given the “big growth” that’s anticipated to come out of companies, he still believes the conflict in the Middle East could weigh on the market. That’s even after President Donald Trump said this week that the U.S. won’t attack Iran prior to the midterm elections early next month.

“That’s the one thing holding this market back from really reflecting how powerful the near-term earnings story is,” the portfolio manager told CNBC. “A more violent, more kinetic, more border-expanding war is not priced into the market.”