The Dow Jones Industrial Average surged 556.21 points, closing at 52,177.69 on Thursday as investors moved away from the previously popular artificial intelligence (AI) trade, shifting instead toward value stocks. While the S&P 500 gained 0.33% to 7,744.06 and the Nasdaq Composite edged up 0.08% to 26,713.03, the tech-heavy Nasdaq had earlier dropped 1.4% before recovering. Rising concerns about excessive spending by tech companies on AI projects sparked rotation, alongside investor caution as new data revealed persistent inflation in the U.S.

Memory chip makers faced heavy selling amid fears of an upcoming glut and increased competition from China, pressuring South Korean stocks such as SK Hynix, which fell over 10%, pulling down the Kospi index by more than 6%. Elon Musk noted on social media that China is expected to produce large volumes of RAM by 2028, intensifying worries for chipmakers globally. Meanwhile, AI companies like Anthropic reported third-quarter revenue of $16.8 billion, but traders viewed the growth as slower than anticipated, pressuring gains in chip-related firms.

Some AI-related stocks rebounded, including CoreWeave, which rallied nearly 6% after a previous sharp drop amid concerns over its debt for AI expansion. Micron Technology also recovered, gaining nearly 2%. Investors weighed the attractive yields on Treasury securities, now at their highest since the early 2000s, against the risks of concentrated AI exposure. This shift toward broader market participation was reflected by improving breadth, with over half of S&P 500 stocks trading above their 200-day moving averages, led by retailers like Walmart and Nike.

Inflation readings continued to influence investor sentiment, with producer prices climbing 1.3% in September month-over-month and 6.3% year-over-year—the largest increase since late 2022. These figures, following slightly hotter consumer price data, raised concerns about potential Federal Reserve tightening before year-end, adding to market volatility. Outside of tech, sectors such as retail and healthcare gained ground, while small-cap stocks continued their slide into correction territory, reflecting a complex environment for investors amid evolving economic and geopolitical factors.