The single sharpest fact is that the S&P 500 climbed 0.9% in the face of concerns over the return on investment in artificial intelligence. The Dow Jones Industrial Average was up 361 points, or 0.7%, in mid-afternoon trade, and the Nasdaq composite was 1.4% higher.
The Australian sharemarket is set to advance, with futures at 4.53am AEST pointing to a gain of 16 points or 0.2% at the open. The ASX closed flat on Tuesday. The Australian dollar was trading at US70.05¢.
AI stocks have been under pressure in recent weeks due to worries over their high valuation after the AI boom. However, for the second day in a row, they rose in value. This rebound came despite concerns that the AI-driven growth may slow down due to reduced profit and productivity gains.
The top performers were Micron Technology and Nvidia. Micron Technology jumped 12.7%, adding to its 1.9% gain from the day before, recovering from its 13.3% drop last week. Meanwhile, Nvidia added 1.5%. These gains were key to lifting the S&P 500.
The gains came despite an increase in oil prices, with Brent crude oil topping US$90 per barrel due to ongoing tensions between the US and Iran. Rising oil prices threaten reacceleration of inflation, which could prompt the Federal Reserve and other central banks to raise interest rates. This, in turn, could slow down economies and undermine stock prices and other investments.
The yield on the 10-year Treasury edged up to 4.63% from 4.60% late Monday, and from just 3.97% before the war with Iran began. Stronger-than-expected profit reports from big US companies helped stocks strengthen despite added pressure.
3M climbed 6.9% after topping analysts' expectations for both profit and revenue in the latest quarter. The company also raised its forecast for profit over the full year of 2026. Hasbro rallied 7.9% after its Magic: The Gathering game reached US$500 million in revenue for a quarter for the first time. The toy maker also raised its revenue forecast for the year.
General Motors cruised 4.8% higher after the automaker's profit and revenue for the latest quarter beat analysts' expectations and CEO Mary Barra said demand in North America remains strong. The gains helped offset a drop for Danaher, which slid 11.4% despite topping analysts' expectations for profit and revenue.
Alphabet slid 0.9% after Google released a trio of cheaper versions of its Gemini AI model, including Gemini 3.6 Flash and Gemini 3.5 Flash-Lite, designed for use cases that don't require the most cutting-edge technology. Google also unveiled a new lightweight variant, Gemini 3.5 Flash Cyber, tailored towards cybersecurity applications.
Homebuilder D.R. Horton slipped 0.8% despite topping profit and revenue expectations for the latest quarter. The company still feels the effects of affordability concerns in the housing market and caution among potential homebuyers. Mortgage rates have already climbed to their highest level in nearly a year due to higher Treasury yields in the bond market, which could force D.R. Horton to offer more incentives to homebuyers in the current quarter, cutting into its profits.
Several stronger-than-expected profit reports from big US companies helped stocks strengthen, despite added pressure. Indexes are near their records, even with the recent shakiness for AI stocks. Companies are under pressure to deliver strong growth in profit and revenue due to how high their stock prices have shot.
In international markets, indexes rose modestly in Europe. The United Kingdom's FTSE 100 added 0.6% after new Prime Minister Andy Burnham hosted his first Cabinet meeting.
In Asia, stocks swung more. South Korea's Kospi jumped 3.6% on strong gains for its two dominant stocks, Samsung Electronics and SK Hynix, which have been big beneficiaries of the AI boom. Tokyo's Nikkei 225 climbed 3.3% after returning from Monday's holiday, while indexes rose 1.8% in Shanghai and edged down by less than 0.1%.