US stocks opened higher on Friday as investors assessed softer-than-expected producer inflation data and a partial recovery in Nvidia shares following a turbulent week for the artificial intelligence sector.
The October Producer Price Index (PPI) rose 0.3% month over month, below economists’ expectations of a 0.4% increase.
The reading offered some relief to investors concerned about persistent inflation and the Federal Reserve’s interest rate outlook.
The Dow Jones Industrial Average rose 143 points. The S&P 500 gained 0.13% while the Nasdaq Composite fell 0.13%.
The gains followed a volatile session on Thursday, when the major indexes retreated amid concerns surrounding Nvidia’s leadership change and the broader AI trade.
Softer producer inflation supports US stock futures
The latest inflation data helped lift sentiment ahead of the market open, although the annual increase in producer prices remained elevated.
The PPI rose 6.5% from a year earlier, marking its largest annual increase since November 2022.
The monthly reading was nevertheless below the 0.4% increase forecast by economists.
The data comes as traders anticipate another interest rate increase from the Federal Reserve in December.
Markets are fully pricing in a rate hike next month, with expectations centred on a 25-basis-point increase.
However, the possibility of a larger 50-basis-point move remains in focus.
According to CME’s FedWatch tool, the probability of such an increase stood at 10.7%.
The latest producer inflation figures may ease some concerns about the pace of monetary tightening, but the annual price increase suggests inflationary pressures remain significant.
Nvidia rebounds as AI stocks recover from leadership turmoil
Nvidia shares fell 0.88% on Friday after losing approximately 11% over the week through Thursday.
The chipmaker has faced considerable pressure following the resignation of founder and chief executive Jensen Huang.
Chief Financial Officer Colette Kress was named interim CEO as the board began searching for a permanent replacement.
The leadership change has raised questions about the company’s future direction and the potential implications for the broader AI industry.
Nvidia plays a central role in the sector, while its financing arrangements with other AI companies could also attract greater scrutiny.
Despite the concerns, the recovery in Nvidia shares helped support sentiment towards technology stocks.
Cerebras also gained more than 16% after raising its 2026 revenue forecast and announcing Microsoft as a customer.
Microsoft shares, meanwhile, dipped 1.32% following an outage affecting Outlook and Teams that lasted more than 12 hours.
Earnings strength and geopolitical risks remain in focus
Corporate earnings have provided some support to equities despite the recent volatility.
Of the 450 S&P 500 companies that had reported results by Thursday, 83.6% had exceeded analyst expectations, according to LSEG Data and Analytics.
However, investors continue to monitor geopolitical developments and their potential impact on financial markets.
Oil prices remained higher for a third consecutive session after US President Donald Trump said Washington did not need an agreement with Iran.
The comments have raised concerns about the possibility of prolonged conflict and further disruption to energy supplies.
Crypto-related stocks also fell in trading.
Coinbase and Strategy declined between 1% and 3%. Bitcoin fell below $70,000 for the first time since August.
Despite the week’s turbulence, the major US indexes remained on course for weekly gains.
The Nasdaq was set for a 3.2% advance, while the S&P 500 was poised to gain 2.9%.
The Dow was on track for an increase of nearly 2%.
All three indexes were heading towards their strongest weekly performances since early August.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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