Bank Stocks JPMorgan, Goldman Sachs Lift Dow To One-Month High Despite AI Selloff

Wall Street's Dow Jones Industrial Average advanced to a one-month high as gains in banking stocks JPMorgan Chase and Goldman Sachs helped offset continued weakness in semiconductor and artificial intelligence-linked shares.

The Dow gained 129 points, or 0.3%, while the S&P 500 fell 0.4% and the Nasdaq Composite declined 1.1%, reflecting the divergence between traditional blue-chip stocks and technology shares amid concerns over competition in the semiconductor industry and rising borrowing to finance artificial intelligence infrastructure.

JPMorgan Chase shares rose around 2%, while Goldman Sachs gained approximately 1%, providing support to the Dow. Sporting goods retailer Nike and pharmaceutical company Merck also advanced around 1% each, adding to the index's gains.

Chipmakers remained under pressure, with the VanEck Semiconductor ETF (SMH) falling 1%, extending a difficult week for the sector. Micron Technology, Advanced Micro Devices and Sandisk were among the stocks weighing on the fund.

Semiconductor shares have faced renewed selling pressure amid concerns about growing competition from China. The SMH has declined around 8% week to date, highlighting the scale of the pullback in the sector.

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Weakness across chipmakers and other artificial intelligence-linked stocks has also weighed on the broader technology-heavy Nasdaq Composite. The index has fallen around 3% this week, while the S&P 500 is down nearly 1%, putting both benchmarks on course for weekly losses.

The Dow has bucked that trend, rising more than 1% over the same period, supported by gains in stocks outside the technology sector.

Investor concerns have extended beyond competition in the semiconductor market to the growing cost of building artificial intelligence infrastructure.

Technology companies and data-centre operators have committed substantial sums to expand computing capacity, raising questions about the sustainability of borrowing to fund the buildout. Investors are increasingly scrutinising whether the potential returns from AI-related investments will justify the capital expenditure and debt being accumulated.

Shares of neocloud company CoreWeave fell around 9%, taking its losses for the week to more than 22%. The company's total debt has risen to more than $51 billion, adding to investor concerns about the financial risks associated with the expansion of AI computing infrastructure.

The contrasting performance of the major US indexes underscores a shift in market leadership. While banking and selected consumer and healthcare stocks helped the Dow advance, continued weakness in AI-related shares weighed on the S&P 500 and Nasdaq.