Wall Street snapped a four-day losing streak Wednesday as tech stocks spearheaded a broad market rally. The S&P 500 rose 0.8%, while the Nasdaq surged 1.2%, recovering from Tuesday’s sharp declines. The Dow Jones Industrial Average climbed 188 points, signaling renewed investor confidence despite lingering inflation concerns.
Markets rebounded after a turbulent stretch fueled by weaker-than-expected economic data and fears that AI-driven tech stocks had become overvalued. Super Micro Computer, a server manufacturer central to AI infrastructure, plunged 23% over four days before skyrocketing 23% Wednesday after resolving accounting delays. This volatility underscores the risks and opportunities in AI-related investments, analysts noted.
General Motors surged 6.9% following a $6 billion stock buyback announcement and dividend hike. Meanwhile, all eyes remained on Nvidia, which gained 3.4% ahead of its pivotal earnings report. The chipmaker faces new competition from China’s DeepSeek, which claims its AI model rivals U.S. tech without requiring premium chips.
“Our off-price model continues to resonate with shoppers, and we see significant growth opportunities ahead,” said TJX CEO Ernie Herrman as shares rose 1.5%.
Key drivers behind Wednesday’s rally include:
- Corporate buybacks boosting investor sentiment
- AI infrastructure investments from NRG Energy and GE Vernova
- Stronger-than-expected Q4 earnings across sectors
NRG Energy jumped 10.3% after partnering with GE Vernova to expand power generation for AI data centers. Over 70% of S&P 500 companies have exceeded profit forecasts this quarter, easing recession fears.
Bond markets stabilized following recent yield drops, with the 10-year Treasury inching up to 4.31%. Analysts await Thursday’s final Q4 GDP estimate, expected to confirm steady economic growth.
Overseas, Hong Kong’s Hang Seng soared 3.3% while Japan’s Nikkei dipped 0.2% amid profit-taking in Buffett-backed trading firms. As markets recalibrate, the AI boom’s long-term viability remains central to Wall Street’s trajectory.