Investors focused on AI-related companies, with the Philadelphia SE Semiconductor index surging to a record high.
Chip designer AMD rallied ahead of its quarterly report after the bell, with analysts expecting a 33% surge in revenue.
S&P 500 companies are on track to post aggregate earnings growth of 28% year-over-year for the first quarter, the strongest quarterly profit growth since 2021, according to Tajinder Dhillon, head of earnings research at LSEG.
Wall Street’s AI heavyweights account for much of that optimism.
“Markets are following fundamentals. Earnings are coming in pretty strong, and the expectation is that will carry forward into the rest of the year,” said Tom Hainlin, an investment strategist at U.S. Bank Wealth Management in Minneapolis. “Business spending remains strong, whether it’s on AI or other productivity tools, and consumers continue to spend,” Hainlin said. According to preliminary data, the S&P 500 gained 58.72 points, or 0.82%, to end at 7,259.47 points, while the Nasdaq Composite gained 259.06 points, or 1.03%, to 25,326.51. The Dow Jones Industrial Average rose 354.85 points, or 0.73%, to 49,296.75.
Brent crude futures fell but still traded at $110 a barrel.
Data on Tuesday showed U.S. job openings fell to 6.866 million in March, slightly above the 6.835 million estimate. That reinforced the view that labor market resilience could give the central bank room to keep interest rates higher for longer.
The Institute for Supply Management’s Non-Manufacturing Purchasing Managers’ Index for April came in at 53.6, narrowly missing the estimate of 53.7, according to economists polled by Reuters. Grain trader Archer-Daniels-Midland rose after reporting better-than-expected first-quarter profit on higher margins. DuPont rallied after the industrial materials maker lifted its annual profit forecast. Shares of Pinterest soared after the image-sharing platform forecast second-quarter revenue above analysts’ estimates.
