Wall Street closed higher on Wednesday as artificial intelligence (AI) trade regained investors’ confidence. A series of strong economic data also boosted market participants’ sentiment on risky assets like equities. All three major stock indexes ended in positive territory.
The Dow Jones Industrial Average (DJI) rose 0.3% or 129.47 points to close at 49,662.66 after a choppy session. At intraday high, the blue-chip index was up 364.12 points. At the intraday low, the index was down 64.13 points. Notably, 19 components of the 30-stock index ended in positive territory while 11 ended in negative territory.
The tech-heavy Nasdaq Composite finished at 22,753.64, advancing 0.8% or 175.25 points owing to the strong performance by AI bigwigs. The S&P 500 gained 0.6% to finish at 6,881.31. However, eight out of 11 broad sectors of the broad-market index ended in the negative territory, while three ended in the positive zone.
The Financials Select Sector SPDR (XLF) and the Real Estate Select Sector SPDR (XLRE), rose 1.1% and 1%, respectively. On the other hand, the Energy Select Sector SPDR (XLE), the Materials Select Sector SPDR (XLB) and the Consumer Staples Select SPDR (XLP) fell 1.1%, 1.2% and 1.5%, respectively.
The fear gauge CBOE Volatility Index (VIX) was down 3.3% to 19.62. A total of 16.8 billion shares were traded on Wednesday, lower than the last 20-session average of 20.7 billion. The S&P 500 reported 23 new 52-week highs and three new 52-week lows. The Nasdaq Composite registered 101 new 52-week highs and 120 new 52-week lows.
AI Trade Regains Mojo
Social media giant Meta Platforms Inc. META has entered into a massive deal with the globally largest AI chipset manufacturer — NVIDIA Corp. NVDA — to install NVDA’s new standalone CPUs (central processing units), next-generation GPUs (graphical processing units) and Vera Rubin rack-scale systems in its AI-powered data centers.
Meta platforms will also use NVIDIA’s networking technology to support AI features on WhatsApp. META has decided to spend an enormous $600 billion in the United States for AI-powered data center infrastructure developments by 2028. The company will spend $135 billion in 2026.
META also entered into a collaboration with Advanced Micro Devices Inc. AMD to develop in-house silicon processors. The social media behemoth is also mulling over using Alphabet Inc.’s GOOGL tensor processing units (TPUs) in its data centers in 2027.
The stock prices of Meta Platforms, NVIDIA and Alphabet advanced 0.6%, 1.6% and 0.4%, respectively. NVIDIA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
