Stocks Claw Back From Fed-Driven Slide as AI Infrastructure Names Split Between Debt Fears and Data Center Wins

Equity markets staged a broad recovery in midday trading Wednesday, shaking off the previous session’s sell-off that followed the Federal Reserve’s latest policy announcement. As of 11:31 AM ET, the Nasdaq Composite had gained 1.54% to reach 26,379, the S&P 500 climbed 1.01% to 7,628, and the Dow Jones Industrial Average advanced 0.55% to 51,745.

The rebound came alongside notable moves in other asset classes. Gold rallied 2.37% to trade at $4,364.66, while the 10-year Treasury yield slipped 6 basis points to 4.95%. Sector performance was mixed: energy shares lagged the broader market with the steepest declines, while technology and healthcare names led the advance.

AI Debt Concerns Weigh on CoreWeave

CoreWeave was a notable laggard among AI-focused companies, with shares down 3.8% to $84.08 in midday trading, giving the cloud infrastructure provider a market capitalization of roughly $48.4 billion. The decline followed the company’s announcement of a $3 billion convertible bond sale, a move that has intensified investor scrutiny of how technology firms are financing expensive artificial intelligence buildouts. CoreWeave operates a cloud platform built around proprietary software designed to manage complex AI workloads, a business model that has required substantial capital investment.

Memory Chipmakers Rally on Data Center Demand

While CoreWeave digested its debt offering, memory and storage stocks surged. Sandisk jumped 12.3% to $1,740.00, valuing the NAND flash storage specialist at approximately $186.4 billion. Fellow storage player Micron Technology climbed 6.58% to $1,016.59, pushing its market cap above $1.14 trillion. The gains suggest investors remain enthusiastic about demand for the memory and storage products that underpin AI data centers, even as they grow warier of the financing strategies of the infrastructure operators themselves.

Generac Surges on Amazon Data Center Deal

Among the session’s biggest movers, generator maker Generac soared nearly 20% after news emerged of a data center deal with Amazon. The agreement underscores how the AI buildout is creating demand well beyond chip designers and cloud providers, extending to power and infrastructure equipment suppliers.

The divergence in Wednesday’s trading — debt-funded AI infrastructure operators under pressure while component makers rally — highlights the market’s ongoing debate about the sustainability and financing of the AI investment cycle.

Source: original release

What to watch

• Details on terms and pricing of CoreWeave’s $3 billion convertible bond sale
• Further disclosures from Generac and Amazon regarding the scope and timeline of their data center agreement
• Upcoming quarterly results from memory makers Micron and Sandisk for evidence of sustained data center demand
• Federal Reserve commentary for signals on the rate path following this week’s policy meeting