US stocks finished sharply higher on Friday, snapping a four-day losing streak despite a hotter-than-expected CPI report. Although the inflation data pushed the probability of another Federal Reserve rate hike toward 90%, Treasury yields backed away from their session highs, oil prices retreated, and buyers returned to equities.
The rebound was broad, with the major indices gaining between 0.45% and 0.98%. Nevertheless, one strong session was not enough to erase the losses accumulated earlier in the week.
US stock market closing levels
- Dow industrial average rose 509.05 points, or 0.98%, to 52,578.27
- S&P 500 rose 65.28 points, or 0.86%, to 7,656.97
- Nasdaq composite rose 251.31 points, or 0.96%, to 26,333.04
- Russell 2000 rose 12.997 points, or 0.45%, to 2,903.94
- Nasdaq 100 rose 264.93 points, or 0.91%, to 29,368.44
For the trading week
- Dow industrial average fell 1.57%
- S&P 500 fell 0.80%
- Nasdaq composite fell 0.66%
- Russell 2000 fell 2.41%
- Nasdaq 100 fell 0.59%
The Russell 2000 was the week’s weakest major index. Smaller companies tend to be more sensitive to borrowing costs, making them particularly vulnerable when Treasury yields rise and expectations for tighter Federal Reserve policy increase.
Dell and Super Micro benefit from Oracle’s AI spending plans
Dell Technologies surged 11.94% to a record close near $567.12 as investors focused on the continuing buildout of AI infrastructure. The catalyst was not a Dell earnings report but Oracle’s massive data-center investment plans. Oracle is expected to spend roughly $90 billion to $95 billion this fiscal year as it expands the computing capacity needed to meet rapidly growing AI demand. Shares of a Dell are up 350% this year.
Super Micro Computer (SMCI) is another potential beneficiary of that same spending cycle. Like Dell, Super Micro supplies the high-performance servers, GPU systems, complete server racks and liquid-cooling technology required to build large-scale AI data centers. Its liquid-cooled systems are particularly relevant because increasingly powerful AI chips generate enormous amounts of heat and require more advanced cooling infrastructure.
That spending is a cost and execution challenge for Oracle, but it represents potential revenue for companies supplying AI servers, storage, networking and cooling equipment. In simple terms, Oracle’s capital expenditures can become order flow for Dell, Super Micro and other AI-infrastructure suppliers.
The moves also highlight the “picks and shovels” side of the AI trade. Investors do not have to determine which company will ultimately produce the best AI model. Hardware suppliers can benefit as long as Oracle, Microsoft and other major technology companies continue spending aggressively to build the infrastructure needed to train and operate those models
Oracle beats expectations but gives up its early gains
Oracle shares initially surged more than 8% following stronger-than-expected earnings but reversed and closed down 1.78% at $150.22. The company reported adjusted earnings of $1.92 per share, above expectations of $1.74, while revenue increased 30% to $19.3 billion, also beating estimates. Cloud infrastructure revenue surged 121%, while remaining performance obligations—or contracted revenue that has not yet been recognized—rose to $664 billion.
The numbers were impressive, but the price action shows that expectations matter as much as the actual results. Investors remain concerned about the enormous amount of capital Oracle must commit to data centers, the effect that spending could have on free cash flow and margins, and its reliance on several very large AI customers. Oracle burned $5.4 billion in free cash flow during the quarter, although that was better than feared. After the sharp premarket rise, traders used the strength to take profits, and the early buyers could not maintain control.
For traders, the contrasting moves in Dell and Oracle provide an important lesson. The same AI spending boom can be interpreted differently depending on where a company sits in the investment cycle. For Dell, the spending represents demand. For Oracle, it represents future growth—but also substantial near-term costs, financing needs and execution risk.
This article was written by Greg Michalowski at investinglive.com.