US Stock Market Engages in Modest Recovery Amid AI Industry Developments
NEW YORK (AP) — On Tuesday, the U.S. stock market experienced an upswing, fueled by a renewed appreciation for the burgeoning artificial intelligence sector.
The S&P 500 exhibited a 0.6% increase, recovering from a 1% decline the previous day. As of 11:30 a.m. Eastern Time, the Dow Jones Industrial Average surged by 353 points, equating to a 0.7% rise, while the Nasdaq composite climbed 0.9%.
Advanced Micro Devices (AMD) emerged as a key player in this positive momentum, witnessing a remarkable 7.3% gain following the announcement of a multiyear agreement to supply chips for Meta Platforms’ AI initiatives.
This deal also grants Meta the option to purchase up to 160 million shares of AMD at a nominal rate of one cent each, contingent upon the volume of chips procured.
This development serves as a poignant reminder of the excitement surrounding the investment influx into AI, a technology poised to transform global economies and enhance productivity.
Conversely, a discernible shift in investor sentiment has occurred, with growing concerns about AI’s potential repercussions on corporate profitability.
Industries such as software, trucking logistics, and financial services have found themselves facing critical scrutiny, leading to significant stock sell-offs as investors weigh perceived threats.
IBM’s stock rebounded by 3.9% on Tuesday, partially offsetting the previous day’s substantial 13.1% plunge—the company’s steepest fall since 2000.
This turbulence has also seeped into the private equity sector, where apprehensions have intensified regarding the repayment viability of loans extended to software firms reliant on recurring revenue. Blue Owl Capital witnessed a 1.8% decline, compounding its year-to-date loss to 31.4%.
In a notable update, Anthropic introduced new AI tools designed for diverse business applications, ranging from human resources to engineering and investment banking.
According to Dan Ives, an analyst at Wedbush, this unveiling may indicate that fears surrounding AI’s disruption of the software industry could be exaggerated.
He noted, “While these use cases are impressive, the reality is that these new AI tools will not replace existing software ecosystems. Their efficacy is contingent upon the quality of the underlying data.”
One particular innovation allows users to integrate financial market data from FactSet into the Claude system.
This development resulted in a 6% jump in FactSet Research Systems’ stock, marking one of the most significant gains within the S&P 500, even as it remains approximately 30% lower year-to-date.
S&P Global rose by 2.8%, while MSCI added 2%, buoyed by Anthropic’s launch of similar connectors and plugins.
Apart from the jitters surrounding AI, major U.S. corporations have continued to report quarterly earnings that often exceed analyst forecasts.
Keysight Technologies surged 23%, marking the largest gain in the S&P 500 following stronger-than-expected profit and revenue results. The company also projected a revenue increase of nearly 30% for the current quarter compared to last year.
Similarly, Home Depot enjoyed a 3% rise after reporting profit and revenue that surpassed analysts’ estimates, despite CEO Ted Decker acknowledging “ongoing consumer uncertainty.”
These gains helped cushion the impact of a 1.4% decrease in Coinbase Global’s stock, as the cryptocurrency trading platform fell below $64,000, approximately half its record high from October.
Globally, stock indices in Europe exhibited modest gains.
The situation was more volatile in Asia; South Korea’s Kospi index soared by 2.1%, while Hong Kong’s Hang Seng index declined by 1.8%. Shanghai stocks increased by 0.9% after reopening from an extended holiday.
In the bond market, Treasury yields remained relatively stable following a report indicating greater-than-expected improvements in consumer confidence in the U.S. The yield on the 10-year Treasury stood at 4.03%, unchanged from late Monday.
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