Friday Was Ugly. Monday Morning, Wall Street Decided It Was a Sale.
Close your eyes and remember Friday’s close. The Nasdaq down 2.1% in a single session. Four weeks of winning wiped out in five days. The AI trade, the thing that carried this market on its back all year, was being treated like last week’s leftovers. CoreWeave lost a quarter of its value in a week. Chip stocks were in free fall. And if you were watching the tape, the word on every screen was one Wall Street hates: rates.
Then Monday morning came, and the mood flipped. The Nasdaq jumped about 1.3% in early trading. The S&P 500 rose around 0.7%. The Dow barely moved, which is funny, because the Dow was the index that held up best last week. The rotation reversed. The fear reversed. And the people who panicked out of AI stocks on Friday got to watch them rally without them.
This is not a story about everything being fine. It is a story about how fast the story can change, and about the three forces that pushed it today: a tech rebound led by memory chips, a real shift in what investors believe the Fed will do, and an oil price falling because Washington made a move on Russia.
The Memory-Chip Mob Led the Charge
Start with the loudest part of Monday’s tape. The Roundhill Memory ETF, ticker DRAM, bounced more than 5% after falling nearly 6% on Friday. Its components, Western Digital, Sandisk, Micron, and Seagate, were up as much as 6.5% each. The broader iShares Semiconductor ETF, SOXX, climbed about 3% after dropping 4% to end last week.
That matters because memory was the epicenter of last week’s pain. AI data-center spending lives or dies on memory, and last week investors decided the spending spree was about to become a debt crisis. On Monday, somebody decided otherwise, and the buying was frantic. AMD and Nvidia were among the early winners. Intel jumped 3.8% after JPMorgan upgraded it to neutral from underweight.
CoreWeave deserves its own paragraph. The Nvidia-backed data-center company plunged 25% last week on balance-sheet fears, the kind of week that ruins careers. Monday it clawed back about 2.5%. It is not saved. Nobody is saved in October. But the market’s message was clear: the selloff overshot, and the brave ones stepped in.
The Fed Bet Just Quietly Moved
Here is the undercurrent that made Monday’s bounce possible. Last week, a hotter-than-expected CPI report pushed traders to start pricing in an October rate hike, with odds climbing above 40% at one point. Then Fed Chair Kevin Warsh gave a speech at the IMF meeting in Bangkok on Friday, and he said nothing. No signal. No warning. No hike tease.
His silence was loud. By Monday, the market was pricing less than a 15% chance of an October increase. The whole bet has shifted to December, where a quarter-point hike is now close to fully priced in.
That did not stop Barclays from making headlines Monday. The bank changed its Fed call and now expects two more 25-basis-point hikes, prompted by the hot CPI and PPI reports. Think about what that means: two hikes over the next several months is still a far gentler path than the panic of October, when markets were worried rates could keep climbing into a weakening economy.
And here is the detail that should make bond investors smile. XTB’s research desk noted that the 10-year yield fell about 17 basis points last week while the Nasdaq 100 dropped 5.5%. The last time stocks and yields fell together that sharply was April 2025, when the tariff announcements rattled everything. Translation: bonds are starting to act like a hedge again. When stocks fall and bonds rally, the market is functioning the way textbooks say it should. That almost never happens these days, and Monday’s calm 10-year, hovering around 5.09%, is part of the story.
Oil Fell Because Washington Made a Move
The third force was energy. West Texas crude slipped about 1% to around $100 a barrel in the morning, and Brent fell 1.8% toward $107. After last week’s surge, that pullback was pure relief for anyone paying gas prices or worrying about inflation.
The trigger was political. President Trump decided to waive some sanctions on Russia, and Secretary of State Marco Rubio said the president would take up to 60 days to assess the economic impact. Sanctions relief is bearish for oil prices, full stop. The market read it that way within minutes.
Do not get too comfortable, though. Iran reported that another tanker had hit a mine in the Strait of Hormuz, and shipping and insurance costs are keeping actual delivery prices much higher than futures suggest. The geopolitical floor under oil is very much still there. But on Monday, the direction of travel was down, and the stock market liked it.
The Movers You Missed (Including Musk’s Wildest Promise Yet)
A few names told the day’s story in miniature:
- Amazon jumped nearly 4%, out front of the megacaps as the AI trade revived.
- Meta slipped nearly 2% and Tesla rose 1.5% ahead of their Wednesday earnings reports, which will decide whether this rally has legs.
- SpaceX rose 2.5% after Elon Musk wrote on X that “next year, I will give one of my SpaceX shares to every kid in America.” The company reports results Tuesday.
- Netflix held its breath ahead of Tuesday’s earnings, the first big test of the week after its recent shakeup.
Bitcoin climbed more than 1% to around $82,000, recovering from a weekend low near $80,600, and crypto-related stocks rose with it. Gold futures were roughly flat at $4,185 an ounce, catching its breath after the inflation-fueled run.
What Comes Next: The Week That Decides October
Monday was the warmup. The main event is earnings season slamming into full gear:
- Tuesday: Netflix and SpaceX report. Netflix’s first results after cutting roughly 1,000 jobs and replacing its chief content officer.
- Wednesday: Meta and Tesla headline the busiest day of the week, alongside IBM, Lam Research, and a stack of semiconductor names.
- Also this week: CPI data from Canada, the UK, and New Zealand, which will color global rate expectations.
- Then silence: Fed officials enter their quiet period before the October 27-28 meeting, with December, not October, as the hike everyone is now watching.
We have been covering this story all month, from last week’s great AI rotation to the mega-week earnings preview. The throughline has not changed: this market believes AI spending is real, fears the debt behind it is getting dangerous, and trades every headline about interest rates like it is gospel.
Monday’s lesson is the oldest one in the book. Brutal weeks create the conditions for sharp rallies. The dip buyers came back, the fear gauge cooled, and the Nasdaq bought itself a second chance. Whether it deserves one depends entirely on what Netflix, Meta, and Tesla say this week. For now, Wall Street bought first and will ask questions Wednesday. Check the Markets section for our running coverage as it happens.
