The Nasdaq Composite rose 1.05% to 26,701.61, while the S&P 500 gained 0.58% to 7,757.74. The Dow Jones Industrial Average advanced 0.68% to 52,851.78.
AI trade gets fresh support
Super Micro shares jumped after the AI server maker forecast quarterly revenue and profit margins above Wall Street expectations, signalling that demand for AI infrastructure remained resilient. The results also lifted peers such as HPE and Dell, Reuters reported.SpaceX added to the positive tone after Elon Musk's rocket and space technology company reported its first profit as a public company. Musk also said a merger between SpaceX and Tesla would be "a good idea", helping Tesla shares higher.
The reports offered some relief after last week's sharp selloff in AI linked stocks, which had raised questions about whether massive investments in data centres would generate adequate returns.
The SpaceX news "pushes back on some of the investor worries" about AI along with some help from SMCI, Edward Jones senior global strategist Angelo Kourkafas said, according to Reuters.
Kourkafas added that the reports will not "answer all the questions investors have on returns on AI investments, but it's a good start."
Netflix, AT&T limit gains
Technology stocks were the strongest part of the S&P 500, with semiconductor shares also rallying after a volatile month for the sector, Reuters reported.However, weakness in communications services capped the broader market's advance. AT&T fell despite beating third quarter revenue and profit expectations, with the SpaceX results and its recent wireless spectrum purchase raising concerns about stronger competition.
Netflix shares also sank after the streaming company issued a weaker than expected fourth quarter profit forecast. Alphabet declined as well, while Abbott Laboratories fell after cutting its 2026 sales growth forecast, according to Reuters.
Investors will now look for further evidence that the AI trade remains intact as companies including Meta and Tesla report results.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
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