US stocks close higher despite AI credit risk; Dow up 1.08%

US equities reversed early losses to close higher on Thursday, with the Dow Jones up 1.08% to 52,178.28, as investors rotated out of AI-linked tech into other sectors. Credit risks for AI companies triggered the initial selloff, but robust economic activity and inflation data had little impact on indices or rate expectations. The rotation suggests market participants are reassessing AI valuations while broader risk appetite remains intact.