By Tharuniyaa Lakshmi and Ragini Mathur
Oct 19 (Reuters) - The tech-heavy Nasdaq Composite led Wall Street's gains on Monday as investors returned to AI-related stocks following last week's bruising selloff, while declining oil prices lent additional support ahead of key corporate earnings reports.
The benchmark S&P 500 and Nasdaq had posted their biggest weekly drop since late June on Friday, as concerns that higher interest rates could curb investments in AI infrastructure weighed on technology stocks,
particularly data center operators.
The selloff reflected mounting investor unease over how the costly AI build-out will be financed, a question that has increasingly pressured companies underpinning the US bull market, which recently marked its fourth anniversary.
CoreWeave, which was at the center of last week's selloff after its shares plunged more than 25% on worries over a $50 billion debt load, climbed 3.1% on Monday. Goldman Sachs upgraded the neocloud firm to "buy" from "neutral", saying the recent selloff offers a buying opportunity.
Peers Nebius and Iren gained 4.7% and 6.5%, respectively.
Chipmakers Broadcom climbed 3.2% and Micron jumped 5.3%. The Philadelphia Semiconductor Index rose 3.7%, putting it on course to end an eight-day losing streak, its longest run of declines since October 2008.
Amazon.com was up 5.2% after Morgan Stanley named the e-commerce and cloud computing firm as its "top pick".
"The main concern was CoreWeave and the potential for the yields on their bonds going up and the liquidity issues there. That certainly scared people," said Joe Saluzzi, co-head of equity trading at Themis Trading.
"Looks like this morning they've settled down, and I think the trade still seems to have legs."
Focus is now shifting to a busy week of corporate earnings, with Meta expected to beat Wall Street expectations on Wednesday. Elon Musk-led Tesla's results are also due that day, while SpaceX is scheduled to report on Tuesday.
At 11:42 a.m. ET, the Dow Jones Industrial Average rose 91.03 points, or 0.18%, to 52,093.44. The S&P 500 gained 68.47 points, or 0.89%, to 7,727.91, while the Nasdaq Composite advanced 463.92 points, or 1.78%, to 26,603.96.
The session coincides with the 39th anniversary of Black Monday, the 1987 crash that marked the biggest one-day decline in the history of Dow Jones Industrial Average.
Of the 11 S&P 500 constituents, five posted losses. However, consumer discretionary and technology group led the gains, up 2.8% and 2.2%, respectively.
Brent futures were last down 1.7% at around $108 a barrel, following US President Donald Trump's decision to waive some sanctions on Russia. [O/R]
Intel shares rose 5.8% after J.P.Morgan upgraded the stock to "neutral" from "underweight."
Cleveland-Cliffs surged 15.6% after the steelmaker surpassed analysts' estimate for third-quarter profit.
Declining issues outnumbered advancers by 1.11-to-1 ratio on the NYSE, while advancing issues outnumbered decliners by 1.28-to-1 ratio on the Nasdaq.
The S&P 500 posted 10 new 52-week highs and two new lows, and the Nasdaq Composite recorded 20 new highs and 242 new lows.
(Reporting by Tharuniyaa Lakshmi and Ragini Mathur in Bengaluru; Editing by Shilpi Majumdar)
