Stock markets reopened after Labor Day on downbeat momentum. The missile exchanges between the U.S. and Iran lifted oil prices. That will only fuel inflation further, hurting consumer spending.
Although the Nasdaq (QQQ) fell by 32 bps, traders flocked to downstream AI suppliers to hedge against that economic risk. Intel (INTC) gained 9% ahead of Reuters reporting that it made a deal with Amazon (AMZN). It would supply AI chips for the company.
INTC stock also rose on plans that the firm would hike CPU prices for the PC market. Unfortunately, high memory and GPU prices are hurting PC sales. The 10% CPU price increase might cause demand to fall by more than 10%.
Lumentum (LITE) added 11% to close at $978.53. This is a level not seen since mid-June. On Tuesday afternoon, Corning (GLW) signed a multi-billion-dollar deal with Verizon Communications (VZ). It will supply high-density optical fiber.
Verizon said that consumer demand for broadband and converged services surged amid emerging AI needs.
CoreWeave (CRWV) gained 11.72% to close at $99.83. Shorts hold a decisive 16.92% short interest against CRWV stock. Their bet that the firm has unsustainable debt will eventually pay off. However, that will need AI demand to slow.
