Wall St treads water as chips rise, megacaps fall ahead of Fed decision

NEW YORK: US stocks were choppy on Wednesday as weakness in megacaps such as Tesla and Apple offset chipmaker gains sparked by SK Hynix’s bumper results, while investors awaited hyperscaler earnings and the Federal Reserve’s interest-rate decision later in the day.

Memory chipmaker Micron Technology jumped 4.8 percent to its highest in over two weeks after South Korean rival SK Hynix reported a more than sevenfold jump in quarterly profit, boosted by AI infrastructure demand. SK Hynix’s US-listed shares gained 12.2 percent.

The Philadelphia chips index was up 0.9 percent, on track to gain for the fourth straight session.

Limiting gains in main benchmarks, most megacap and growth stocks traded lower. Tesla dipped 1.3 percent after surging more than 9 percent in the last two sessions. Apple eased 0.5 percent, while SpaceX dropped 2.4 percent.

At 11:39 a.m. ET, the Dow Jones Industrial Average rose 155.89 points, or 0.30 percent, to 52,533.46. The S&P 500 gained 16.89 points, or 0.22 percent, to 7,739.58, while the Nasdaq Composite added 4.35 points, or 0.02 percent, to 26,482.16.

Six of the 11 major S&P 500 sectors advanced, with energy leading gains, tracking higher crude oil prices.

The Nasdaq has risen about 2 percent so far this week, following a bruising first half of the month, as sentiment toward AI improved after Anthropic revealed its US IPO filing on Monday.

The focus now shifts to quarterly results from hyperscalers Microsoft and Alphabet, due after markets close on Wednesday, with both companies expected to report accelerating cloud growth.

Investors will closely scrutinize their capital expenditure plans for signs that massive AI investments are generating returns, as concerns over the viability of debt-funded spending amid rising borrowing costs continue to weigh on the sector.

“We can still see that the AI demand has not paused… the number one worry for investors is not AI valuations anymore, but it’s the financing through debt as debt goes through the roof in the US,” said Nadia El Bilassy, senior market analyst at Equiti Group.

Alphabet shares advanced 1 percent following a media report that OpenAI plans to buy Google’s AI chips.

Also on the day, Vertiv jumped 13.2 percent after the digital infrastructure provider raised full-year profit and revenue forecasts, while also topping third-quarter estimates.