Wall Street rallies by $1tn even as Bailey warns AI may not pay off Joe Sledge Mon, November 9, 2026 at 2:49 PM EST 3 min read NVDA -4.63% ^GSPC +2.42% ^DJI +2.20% CL=F -4.05% ^NDX +3.46% Trade NVIDIA on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Wall Street gained $1tn (£740bn) on Monday after shrugging off fears of an AI bubble and a national security scandal at Nvidia.
Stock markets enjoyed their best day for seven months, propelled by hopes of falling oil prices after Donald Trump claimed fresh Iran strikes were "highly unlikely".
The relief rally marks a sharp reversal from last week, when fears of a crackdown on AI data centres sent tech shares falling by their most in six years.
The S&P 500 rose 2.1pc, the Nasdaq 100 gained 2.4pc, and the Dow Jones Industrial Average was up 1.9pc.
The boost came as Andrew Bailey warned that bets on AI could take years to pay off, risking a further sell-off by disappointed investors.
Mr Bailey, the Governor of the Bank of England, said the financial benefits of the new technology will "take longer to be realised than predicted".
Speaking in Switzerland, he warned of the risk of an AI bubble, citing Thomas Edison, who took years to commercialise electricity after inventing the light bulb.
"The returns may be good, and they may match expectations, but they take longer to be realised than predicted.
"This has been the case historically with big general purpose technology innovation – take Edison and electricity, for instance. There are good reasons to believe that the world moves faster now, but still the timing may not live up to market expectations."
Fears had grown last week that the AI boom was about to unravel after the tech-heavy Nasdaq 100 fell by the most since 2020.
This was triggered by the Democrats' midterm election victory, which had prompted fears of a slowdown in the data centre construction central to the growth of AI.
However, investors on Wall Street partially shrugged of their concerns on Monday, sending shares up across the board.
The Philadelphia Semiconductor Index, a grouping of the world's largest chip developers, rallied as much as 7pc.
Fresh revelations that Jensen Huang, the Nvidia's founder and chief, had admitted to an affair with an alleged Chinese spy also failed to stem the Nasdaq rally despite Nvidia shares falling 8pc.
Chris Larkin, from Morgan Stanley, said: "There's good reason to believe the stock market's long-term rally is intact."
David Solomon, the chief executive at Goldman Sachs, also attempted to boost confidence by predicting even more investment investment in data centres and AI infrastructure.
"The market is open and transactions are happening," he said.
The direction of oil prices offered further confidence to investors on inflation, after Mr Trump played down the likelihood of further strikes on Iran.
The US president downplayed the chances that he will order extensive strikes on the Islamic Republic, comments that helped send Brent Crude down 7.9pc to $90 a barrel, a 10-week low.
Market strategists suggested that last week's sharp loss of momentum may have hammered the optimism of investors.
Dubravko Lakos-Bujas, at JP Morgan, said there were "increasing signs of investor capitulation" and labelled the latest pull-back the "largest unwind of long momentum against the market in about 40 years".
Ulrike Hoffmann-Burchardi, from UBS, said buyers were using the slump in AI shares prices to pick up companies on the cheap.
He said: "Investors whose technology exposure has grown beyond its intended portfolio weight may therefore wish to use periods of market strength to rebalance, lock in some gains, and diversify across sectors and regions."
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