AI hardware stocks led a Nasdaq rally on Wednesday. Super Micro Computer jumped +9.55% after raising its revenue forecast by about a quarter, and Dell, Hewlett Packard Enterprise, AMD and Nvidia followed a day after SpaceX reported its first profit as a public company.

The same SpaceX report hurt the wireless carriers. AT&T fell −6.45% despite beating estimates and raising its profit outlook, as investors weighed SpaceX’s plan to become a major U.S. mobile carrier. Oil jumped right after settlement on a drone attack at a Saudi oil field and a report on Gulf embassy evacuations, and after the close Meta, Tesla, IBM and Lam Research produced some of the widest after-hours swings of the season.

Index Performance

Cross-Asset Snapshot

AI Hardware Stocks Lead the Nasdaq

The Nasdaq Composite rose +1.05% to 26,702.86 and the Nasdaq 100 gained +1.13% to 29,822.52. The S&P 500 added +0.58% to 7,757.17 and the Dow climbed 360.21 points, or +0.69%, to 52,856.09. The Russell 2000 lagged with a gain of +0.27%. The Philadelphia Semiconductor Index rose +1.97% and the VIX fell −3.64% to 16.68.

Super Micro set the tone before noon. The server maker raised its forecast for fiscal first-quarter revenue to $18.5 billion to $19.5 billion from $14.5 billion to $15.5 billion and lifted its gross margin guidance to 12% to 12.5%, Yahoo Finance reported. The shares rose as much as 12% intraday. Full results are due November 3. Dell gained +5.27%, HPE +3.71%, AMD +3.36% and Nvidia +2.54%.

The forecast landed on a market already primed by SpaceX. On Tuesday evening the company reported third-quarter revenue of $14.6 billion, up 161%, and net income of $4.4 billion, its first profit since going public. Its Super Intelligence segment, which rents computing capacity to customers including Anthropic and Google, brought in $7.56 billion, more than Starlink’s $5.25 billion, Fortune reported. SpaceX also spent $19.6 billion on capital projects in the quarter. SpaceX shares closed +7.79% at $159.31.

A server maker raising its quarterly sales outlook by $4 billion and a new compute landlord spending nearly $20 billion in three months suggest the orders for AI equipment are still growing, whatever the stock market thought of them last week.

Technology did nearly all the lifting. Weighting each S&P 500 member’s move by its market value, the information technology sector accounts for about 125% of the index’s net gain, and 61 of its 75 members rose. Nvidia alone supplied about two-fifths of the gain, Apple about a fifth and Tesla about 15%. Communication services took back nearly half, almost all of it through Alphabet, which fell −1.62% ahead of its earnings next week.

The rest of the market was more mixed. Of the 503 S&P 500 members, 281 rose and 221 fell, and the average stock gained +0.33%. The Invesco S&P 500 Equal Weight ETF (RSP) rose +0.36%, behind the +0.53% gain for the SPDR S&P 500 ETF (SPY). Health care, consumer staples, real estate and communication services all fell.

Last Week’s Losers Take the Lead Again

Wednesday looked a lot like Monday, only stronger. Sorting the S&P 500 by last week’s performance, the fifth of the index that fell most last week, down an average of −10.4%, rose +1.86% on Wednesday, and 82 of its 100 stocks gained. The fifth that did best last week, up an average of about 7%, fell −0.41%, and only 28 of its 103 members rose. The correlation between last week’s move and Wednesday’s was −0.51, the most negative reading of the week and sharper than Monday’s −0.37.

Tuesday had briefly run the other way, with every group rising and last week’s losers trailing. Over the three sessions since Friday, the worst fifth has now gained an average of about 3.0%, while the best fifth is up about 0.8% and the middle fifth only about 0.2%.

The names at the top of the laggard group show what investors went back to: Super Micro, Bloom Energy, Datadog, Ciena, Dell, CrowdStrike, Palantir and Constellation Energy gained between 4.6% and 9.6% after falling hard last week. Last week’s leaders fell hardest where the money had been hiding — telecom carriers and cable operators such as AT&T, T-Mobile, Verizon and Charter, along with Medtronic, Stryker and Mondelez.

Power and data center suppliers rejoined the rally. Bloom Energy rose +7.13%, Constellation Energy +4.60%, Vertiv +4.22% and GE Vernova +4.00%. Bloom reports after the close on Thursday.

A Web Security Scare Lifts Software

Cybersecurity stocks had a news hook of their own. The PHP development team disclosed two serious flaws in the language that runs most of the web’s server-side code, and agencies in the Netherlands and Finland took sites offline while they patched, TradingKey reported, citing CNBC. Dutch government portals, the Port of Rotterdam and several hospital websites were among those shut down. Fixed versions of PHP were released on Wednesday afternoon in Europe.

Zscaler rose +7.84%, Okta +7.54%, Datadog +6.50%, Cloudflare +5.32% and CrowdStrike +5.26%. CrowdStrike also expanded its partnership with Nvidia to build its security controls into Nvidia hardware and detect AI agents that misbehave, 24/7 Wall St. reported, and Zscaler announced support for Nvidia’s reference architecture for securing autonomous agents, according to Benzinga.

Rallies on vulnerability news tend to fade when no large breach follows. The partnerships with Nvidia are the steadier support, since every company deploying AI agents needs a way to watch what those agents do.

Starlink Weighs on Telecoms

AT&T’s third quarter was better than expected on most measures. Revenue rose 5.3% to $32.3 billion and adjusted earnings came to 65 cents a share, the company said. It raised its 2026 adjusted profit outlook to about $2.40 a share from $2.25 to $2.35, and accelerated buybacks to about $10 billion this year, Invezz reported.

Investors focused on subscribers instead. AT&T added 379,000 postpaid phone customers, down from 432,000 in the second quarter and slightly below the consensus. On SpaceX’s call the night before, the company said Starlink Mobile had passed 22 million monthly users, up 37% in a quarter, and repeated that it plans to become a major U.S. carrier. Chief executive John Stankey played down the threat from the low-band spectrum SpaceX is buying, saying AT&T runs six to eight such carriers in a typical metro area, and he argued that indoor coverage still separates his network.

The shares fell −6.45% to $21.91, the worst performance in the S&P 500. T-Mobile lost −2.54% and Verizon −2.20%. All three had sold off on October 8, when SpaceX agreed to buy 800 MHz spectrum licenses from Grain Management to improve indoor coverage, Yahoo Finance reported.

The carriers had been safe-haven stocks during the chip selloff, and that trade is now under strain from two sides. When money flows back into growth, defensive names lose their bid. And the company pulling that money is now also promising to compete for their customers.

Oil Jumps After the Settlement

Crude finished the regular session almost flat. December Brent settled at $108.82 a barrel, little changed, and December WTI settled at $97.15, down −0.7%, according to Kitco. Government data showed U.S. crude inventories fell by 3.06 million barrels last week, more than the 0.82 million analysts expected, Babypips noted.

The big move came minutes after settlement. Debris from an intercepted drone killed two workers and injured two more at the Aramco-operated Shaybah oil field in southeastern Saudi Arabia, the kingdom’s energy ministry said, the Associated Press reported. Around the same time, Reuters and AFP reported that the U.S. would order embassy staff out of posts across the Gulf. The State Department later said the ordered departure of non-emergency staff and their families applied to Saudi Arabia only and called the wider reports inaccurate, Middle East Eye reported. A spokesperson cited rising Houthi attacks on Saudi airports and critical infrastructure.

Five-minute prices show how fast the move came. Brent traded at $108.84 at 2:40 p.m. and $110.21 at 3 p.m., and post-settlement trading reached $110.33 by 3:09 p.m., Rigzone reported. WTI rose from $97.16 to $98.32 over the same 20 minutes. Stocks took the other side. The S&P 500, up +0.73% at 2:40 p.m., was up only +0.34% by 3 p.m., and the Nasdaq 100 gave back half a point before both recovered into the close once the State Department narrowed the order.

Because the jump came after settlement, Wednesday’s official prices understate where oil ended the day. Brent was still near $109.80 at 4 p.m., and the move will show up in Thursday’s settlement. Natural gas fell −6.11% to $2.782.

Rates, Gold and the Fed

Treasury yields edged higher. The 10-year yield rose 2.9 basis points to 5.146% by 3 p.m. and the 30-year yield 1.4 basis points to 5.439%. Part of the afternoon rise came with the oil spike. The dollar index was flat at 101.696, and Bitcoin rose +2.38% to about $84,440.

Gold was little changed at $4,142.40. It rose in the morning, slipped as yields and the dollar firmed in the afternoon, and has barely reacted to the swings in oil this week.

Rate expectations eased slightly. Applying the CME FedWatch method to 30-day fed funds futures puts the odds of a hike at the October 27-28 meeting at about 14%, down from 16% on Tuesday and 28% on October 15. The odds of at least one hike by the December 9 meeting held near 94%, and the futures price in about 27 basis points of tightening by then. Fed officials are in their quiet period before the meeting.

The market has moved the hike it expects from October to December rather than dropping it. With oil near $110 and yields above 5%, the main risk to that pricing is a strong jobs report or another oil shock, not anything the Fed says before next week.

Around the Market

Tesla was the strongest of the Magnificent Seven, rising +3.41% to $386.47 before its earnings. Elon Musk had said on SpaceX’s call that a merger of the two companies would be a good idea, and both have formed special committees to study a deal. Over the past 20 sessions the daily moves of Tesla and SpaceX have had a correlation of 0.64, up from 0.15 in SpaceX’s first 20 sessions as a public company, Yahoo Finance noted. Nvidia gained +2.54%, Apple +1.32%, Meta +0.47% and Microsoft +0.20%. Amazon slipped −0.10% and Alphabet fell −1.62%.

Netflix extended its post-earnings slide, falling −5.31% to $65.04, its lowest close since August 2024 and about half its June 2025 record. The company guided to fourth-quarter revenue of $13.4 billion and earnings of 67 cents a share, and cut its 2026 ad revenue forecast to about $2.7 billion from about $3 billion, its shareholder letter showed.

Health care earnings split. Danaher rose +4.29% after adjusted earnings of $2.11 a share, up about 11.5%, and a higher full-year forecast of $8.57 to $8.62, the company said. Abbott fell −1.89% after guiding to comparable sales growth of about 6% for the year and narrowing its profit forecast to $5.50 to $5.55 a share, according to its release.

Crypto stocks rallied with Bitcoin after a federal banking regulator finalized rules for stablecoins, according to Yahoo Finance. Strategy rose +7.54%, Circle +4.47%, Robinhood +3.79% and Coinbase +3.65%. Anthropic could publicly file for its initial public offering as soon as Friday, Yahoo Finance reported, in what could be the largest listing on record.

After the Bell: Big Swings at Meta, IBM and Lam

Meta reported third-quarter revenue of $64.6 billion, up 26%, and forecast fourth-quarter revenue of $73 billion to $76 billion, the company said. Earnings of $3.83 a share included a $9.89 billion legal charge tied to a settlement with 52 state attorneys general; without it, Meta would have earned $7.40. Capital spending was $34.9 billion in the quarter, and Meta narrowed its 2026 range to $135 billion to $145 billion from $130 billion to $145 billion. It gave no 2027 spending figure, and finance chief Susan Li said the company expects to keep investing aggressively, according to a call transcript published by Investing.com. Meta also created a non-voting Class C share, to be distributed one for one in January, which works like a two-for-one split.

Extended-trading prices show how investors went back and forth on the numbers. Meta traded as much as +7.2% above its 4 p.m. price at 4:40 p.m., then gave back most of that and stood +2.0% higher at 8 p.m.

IBM moved even more. Revenue rose 5% to $17.1 billion and software grew 8%, but sales of IBM Z mainframes fell 20%, and the company kept its full-year revenue growth forecast at 4% to 5% while raising its free cash flow outlook, its release showed. The stock rose as much as +7.9% at 4:20 p.m. and was −4.6% at 8 p.m., a round trip of more than 12 points.

Lam Research fell −7.4% after hours even though revenue of $8.22 billion and a December-quarter forecast of $8.60 billion, plus or minus $400 million, both topped estimates, Investing.com reported. The stock had risen nearly 80% over the past year before this month’s chip selloff.

Tesla’s revenue was flat at $28.05 billion and adjusted earnings of 48 cents a share beat the 45-cent consensus. Capital spending more than doubled to $4.73 billion, and free cash flow was $1.53 billion, Electrek reported. The shares rose as much as +2.2% right after the release and were −3.3% at 8 p.m.

The chip group gave back part of the day’s gains after the close. By 8 p.m., the iShares Semiconductor ETF (SOXX) was −1.54% below its regular-session close, AMD −2.21%, Nvidia −1.18%, CoreWeave −3.43% and Nebius −3.24%, and the Invesco QQQ Trust was −0.80%. Texas Instruments was an exception at +1.24%. December Nasdaq 100 futures fell from 30,047.75 at 4 p.m. to about 29,964 by 4:10 p.m. as Lam and Tesla dropped, then recovered to about 30,022 at 4:40 p.m. while Meta traded at its high. The bigger leg came later. When futures reopened at 6 p.m. after their daily one-hour break, a window that covered the start of the Meta and Tesla calls, they were at 29,913.25, and they kept sliding to a low of 29,753.5 at 7:55 p.m., about −1.0% below the 4 p.m. level. Lam set off the first move, but most of the evening’s selling came as Meta’s gain faded and IBM reversed.

What’s Next

On Thursday, Procter & Gamble, Union Pacific, Lockheed Martin, Blackstone, Comcast, Honeywell, Valero and American Airlines report before the open. Weekly jobless claims are due at 8:30 a.m. ET. Western Digital, Newmont, Deckers and Bloom Energy report after the close. Up to 1.3 billion SpaceX shares become eligible for sale on Thursday as a lockup expires, according to Yahoo Finance.

Friday brings American Express and SLB, S&P Global’s October purchasing managers’ indexes and the final University of Michigan consumer sentiment reading.

Microsoft and Alphabet are expected next week, and Amazon reports on October 29, the company said. The Fed’s decision follows on October 28.

Bottom Line

Wednesday’s rally rested on the companies that build and fill data centers. Super Micro’s forecast and SpaceX’s profit gave investors a reason to buy back the AI hardware stocks they sold last week, and the stocks that had served as shelters, from wireless carriers to consumer staples, paid for it.

The evening was less decisive. Meta’s gain shrank through the night, IBM reversed, Lam fell and chip stocks gave back part of the day. Thursday’s open will show whether the rebound in AI hardware holds once the spenders’ plans are priced in.