NEW YORK: The main US indexes advanced on Wednesday as technology shares recovered some lost ground after an AI-led selloff, while investors awaited minutes from the Federal Reserve’s most recent policy meeting later in the day.
Worries that rapidly improving artificial-intelligence tools could disrupt business models rocked US stocks this month, leading to declines in sectors from software to trucking.
The S&P 500 software and services sector, which saw heavy selling earlier this month, rose 1.4 percent, boosted by a 9.5 percent advance in Cadence Design Systems after the chip-design software provider beat fourth-quarter revenue estimates.
Some concerns remained as cybersecurity company Palo Alto Networks dropped 6.3 percent after trimming its annual profit forecast.
Broader AI-linked and megacap technology stocks had lost ground earlier this month as investors demanded stronger evidence the heavy investments in the technology were tangibly boosting revenue and profits.
Most megacap and growth stocks rose on the day, with Nvidia gaining 2.6 percent after the company said it had signed a multi-year deal to sell Meta Platforms millions of its current and future AI chips.
Other megacaps also rose. Amazon.com was up 2.3 percent, while Alphabet and Microsoft gained about 1 percent each.
“Figuring out the winners and losers in AI is likely to be a center theme in 2026. While AI is very promising, investors should not assume that all companies will win on the AI front,” said Paul Stanley, chief investment officer at Granite Bay Wealth Management.
Seven of the 11 S&P sub-sectors were on the rise, with information technology and consumer discretionary leading gains.
Real estate and utilities were laggards, each losing more than 1 percent.
At 11:25 a.m. ET, the Dow Jones Industrial Average rose 280.48 points, or 0.56 percent, to 49,813.67, the S&P 500 gained 58.89 points, or 0.86 percent, to 6,902.11, and the Nasdaq Composite was up 294.79 points, or 1.31 percent, to 22,873.17.
Advancing issues outnumbered decliners by a 2.37-to-1 ratio on the NYSE and by a 2.25-to-1 ratio on the Nasdaq.
The S&P 500 posted 16 new 52-week highs and three new lows, while the Nasdaq Composite recorded 77 new highs and 74 new lows.
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