Back in the Saddle. After a brief AI panic, stocks returned to rally mode on Friday.

Confidence in the future of artificial-intelligence spending—and the market at large—was shaken Thursday by reports that ChatGPT maker OpenAI’s revenue wasn’t growing as fast as expected. It turns out there was more to the story, giving investors enough confidence to buy the dip today.

OpenAI remains a private company, but the back-and-forth dynamic showed up in the public market: Shares of Oracle, whose future revenue is closely tied to an OpenAI deal, rose 4.2% today, recovering most of Thursday’s 5.5% slide.

The tech-heavy Nasdaq Composite rose 0.6%, after falling 1.3% yesterday. The rebound kept the index firmly in positive territory for the week, its fourth consecutive weekly gain.

Meanwhile, the S&P 500 rose 0.6% today, for a 1.2% gain on the week. The Dow Jones Industrial Average added 423 points on the day, 0r 0.8%, and also ended solidly higher on the week.

One disconnect weighed on stocks today with much of the telecom sector getting crushed by news that SpaceX is moving closer to providing mobile phone service to Americans. The Elon Musk-led rocket and satellite company is buying a nationwide portfolio of low-band spectrum that “will pave the way for Starlink Mobile to become a major mobile carrier in the U.S.,” SpaceX said.

The company, with a $2.2 trillion market value, has a lot of weight to throw around. On Friday, it landed entirely on mobile stocks. T-Mobile US shares fell 13.3%, while AT&T and Verizon Communications were down 9.9% and 8.8%, respectively.

SpaceX rose 1.3%.

One set of stocks could win either way: tower companies that lease antenna space to telcos jumped Friday, with American Tower up 9.3% and Crown Castle up 15.6%.

Watch our TV show on Fox Business Saturday and Sunday at 9:30 and10:30 a.m. ET. This week, Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research, on sticking with quality in stocks and bonds.

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The Hot Stock: Crown Castle +15.6%
The Biggest Loser: T-Mobile US -13.3%

Best Sector: Real Estate +1.9%
Worst Sector: Communication Services -0.4%

Stocks’ winning week, despite elevated oil prices and multi-decade high Treasury yields, is a testament to investors’ confidence in the earnings power of corporate America. For the third-quarter earnings season that kicks off next week, S&P 500 profit growth is expected to jump 29.6% from a year earlier, according to FactSet estimates. That would be the third consecutive quarter of greater than 25% earnings growth.

Some 26 S&P 500 companies are slated to report earnings next week, the majority of which are in the financial sector. Citigroup, JPMorgan Chase, Goldman Sachs Group, and Wells Fargo release quarterly results on Tuesday, followed by Bank of America, BlackRock, and Morgan Stanley on Wednesday, and Charles Schwab and Interactive Brokers Group on Thursday.

Outside of the financial sector, Johnson & Johnson and UnitedHealth Group announce earnings on Tuesday, while ASML Holding reports results on Wednesday, followed by Taiwan Semiconductor Manufacturing on Thursday.

The big economic data release next week is Wednesday’s consumer price index from the Bureau of Labor Statistics. Stubbornly high inflation remains the focus of the Federal Open Market Committee, which meets at the end of the month to set monetary policy.

The BLS also releases the producer price index on Thursday, while the Census Bureau reports retail sales data at the same time.

—Dan Lam

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