Wall Street rebound, ASX set to rise
Stan Choe
Updated ,first published
US stocks rose on Tuesday after getting a reminder that the artificial-intelligence boom may also have an upside.
The S&P 500 climbed 0.8 per cent and recovered nearly three-quarters of its sharp drop from the day before. The Dow Jones added 370 points, or 0.8 per cent, and the Nasdaq composite gained 1 per cent.
The Australian sharemarket is set to rise, with futures at 7.45am AEDT pointing to a gain of 63 points, or 0.7 per cent, at the open. The ASX was flat on Tuesday. The Australian dollar was trading at US70.57¢ at 8.28am AEDT. It’s a bumper day on the reporting season calendar, with Fortescue, Woolworths, WiseTech and Flight Centre among those due up.
Advanced Micro Devices helped lead the market and rallied 8.8 per cent after announcing a multiyear deal where it will supply chips to Meta Platforms to help power its AI ambitions. Under the agreement, Meta also got the right to buy up to 160 million shares of AMD stock for 1 cent each, depending in part on how many chips Meta ultimately buys. The series of transactions will be worth “double-digit billions” of dollars per gigawatt, according to AMD chief executive officer Lisa Su, who declined to be more specific about the value of the transaction.
It’s a reminder of the excitement that built in recent years about the billions of dollars pouring into AI, which could remake the world and create a more productive economy.
It also helped produce a sharp turnaround from the prior day, when worries about the potential downsides of AI shook Wall Street, particularly companies and industries that investors fear could be made obsolete. Industries as far flung as software, trucking logistics and financial services have recently seen investors suddenly and aggressively punish them for potentially being under threat.
IBM rose 2.7 per cent to recover some of its 13.1 per cent drop from Monday, which was its worst since 2000.
The pain has also filtered out to the private-equity industry, with fears building that loans it made to software companies dependent on recurring revenue may have less of a chance of getting repaid. Blue Owl Capital rose 2.8 per cent to trim its loss for the young year so far to 28.2 per cent.
On Tuesday, Anthropic unveiled new tools for businesses to use with its Claude AI assistant. They covered everything from human-resources work to engineering to investment banking.
The event suggested that fears about AI supplanting existing software, rather than merely making it easier to use, may be overblown, according to Dan Ives, an analyst at Wedbush. “While these use cases are impressive, the reality is that these new AI tools will not rip and replace existing software ecosystems and data environments with these AI tools only as useful as the data it can reach.”
One of the tools allows users to bring data on financial markets from FactSet into Claude. FactSet Research Systems’ stock jumped 5.9 per cent for one of the biggest gains in the S&P 500, though it’s still down 30.6 per cent for the year so far.
Other companies hit hard by worries about AI competition also trimmed their losses for the year. Salesforce climbed 4.1 per cent, and AppLovin rose 3.3 per cent.
Outside of AI worries, big US companies continued to report mostly better profits for the end of 2025 than analysts expected.
Keysight Technologies rallied 23.1 per cent for the biggest gain in the S&P 500 after topping analysts’ expectations for profit and revenue in the latest quarter. It also said revenue in the current quarter could rise by roughly 30 per cent from a year earlier.
Home Depot rose 2 per cent after likewise delivering stronger profit and revenue than analysts expected. That was even with what CEO Ted Decker called “ongoing consumer uncertainty.”
All told, the S&P 500 rose 52.32 points to 6,890.07. The Dow Jones Industrial Average added 370.44 to 49,174.50, and the Nasdaq composite climbed 236.41 to 22,863.68.
In stock markets abroad, indexes were mixed in Europe amid mostly modest movements.
The swings were larger in Asia. South Korea’s Kospi jumped 2.1 per cent, while Hong Kong’s Hang Seng dropped 1.8 per cent. Stocks in Shanghai rose 0.9 per cent after reopening following a holiday of more than a week.
In the bond market, Treasury yields held relatively steady after a report said that confidence among US consumers improved by more than economists expected. The yield on the 10-year Treasury held at 4.03 per cent, where it was late on Monday.
AP, Bloomberg
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