US Stocks Rebound as AI Optimism Returns/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks rebounded Tuesday as renewed optimism about artificial intelligence lifted tech shares. AMD surged after announcing a major multiyear AI chip deal with Meta Platforms. Strong corporate earnings from companies like Keysight and Home Depot also helped steady markets.
US Stocks Rebound as AI Optimism Returns – Quick Looks
- S&P 500 up 0.6% after Monday’s drop
- Dow climbs 353 points; Nasdaq rises 0.9%
- AMD jumps 7.3% on Meta AI chip agreement
- IBM rebounds after steep prior-day losses
- Anthropic unveils new AI business tools
- Keysight Technologies surges 23% on earnings beat
- Treasury yields hold steady at 4.03%
Deep Look: US Stocks Rebound as AI Optimism Returns
U.S. stocks halted their recent slide Tuesday as investors found renewed confidence in the long-term promise of artificial intelligence, helping major indexes rebound from earlier losses.
The S&P 500 climbed 0.6% after dropping 1% a day earlier. The Dow Jones Industrial Average gained 353 points, or 0.7%, while the tech-heavy Nasdaq Composite advanced 0.9% by late morning trading in New York.
The rally followed a reminder that, despite mounting fears over artificial intelligence disrupting traditional industries, the AI boom still carries powerful growth potential for select companies.
AMD and Meta Spark Tech Optimism
Shares of Advanced Micro Devices surged 7.3% after the chipmaker announced a multiyear agreement to supply processors supporting AI initiatives at Meta Platforms.
Under the deal, Meta secured the option to purchase up to 160 million AMD shares for 1 cent each, contingent in part on future chip purchases. The arrangement underscores the massive capital flowing into AI infrastructure, data centers, and next-generation computing systems.
The agreement served as a fresh catalyst for tech investors who have grown increasingly cautious about whether AI spending will translate into sustained profitability.
Market Jitters Over AI Risks
While AI enthusiasm fueled much of Wall Street’s gains over the past two years, recent trading sessions revealed growing anxiety. Investors have begun scrutinizing whether AI-driven automation could erode profit margins in industries ranging from enterprise software and financial services to trucking logistics.
The previous day’s sell-off illustrated those concerns. IBM fell sharply Monday, marking its worst single-day drop since 2000, before rebounding 3.9% Tuesday.
Private equity firms exposed to software companies dependent on recurring subscription revenues have also faced pressure. Shares of Blue Owl Capital have fallen more than 30% this year amid fears that AI disruption could impair loan repayments.
Anthropic Expands AI Business Tools
Adding to Tuesday’s positive momentum, Anthropic introduced new enterprise-focused AI tools integrated into its Claude platform. The tools aim to support business functions ranging from human resources and engineering to investment banking.
Analysts suggested that the new capabilities signal AI’s role as a complement — rather than a replacement — to established software ecosystems.
Dan Ives of Wedbush argued that fears of AI “ripping and replacing” traditional systems may be overstated. Instead, many AI tools rely heavily on existing data infrastructures to deliver value.
The announcement boosted shares of financial data providers. FactSet Research Systems jumped 6%, while S&P Global rose 2.8% and MSCI gained 2%.
Strong Earnings Provide Support
Beyond AI, corporate earnings continued to underpin the market’s resilience.
Keysight Technologies soared 23% after reporting quarterly profit and revenue that exceeded Wall Street’s expectations. The company also forecasted revenue growth of roughly 30% for the current quarter compared with a year earlier.
Retail giant Home Depot rose 3% after posting stronger-than-expected results despite what CEO Ted Decker described as “ongoing consumer uncertainty.”
However, not all sectors shared in the gains. Coinbase Global fell 1.4% as bitcoin slipped below $64,000, roughly half its peak price reached last October.
Global Markets and Bonds
Overseas markets were mixed. South Korea’s Kospi jumped 2.1%, while Hong Kong’s Hang Seng fell 1.8%. Shanghai’s markets gained 0.9% after reopening from an extended holiday.
In U.S. bond markets, Treasury yields remained relatively steady. The yield on the 10-year Treasury held at 4.03% following a report showing stronger-than-expected consumer confidence.
AI’s Double-Edged Market Impact
Tuesday’s rebound highlights Wall Street’s evolving relationship with artificial intelligence. While concerns persist about job displacement, industry disruption, and valuation risks, AI continues to attract enormous investment and corporate partnerships.
For investors, the market’s performance reflects a balancing act: weighing transformative technological growth against near-term volatility and shifting expectations.
As AI development accelerates, traders appear poised for continued swings — but Tuesday’s session offered a reminder that optimism about innovation still holds significant sway over U.S. markets.
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