U.S. stocks rebounded Tuesday as investors were reminded that the artificial intelligence boom still holds major growth potential, easing fears that had shaken markets a day earlier.
The S&P 500 climbed 0.8 percent, recovering nearly three quarters of Monday’s sharp decline. The Dow Jones Industrial Average gained 370 points, also up 0.8 percent, while the Nasdaq composite rose 1 percent.
Shares of Advanced Micro Devices surged 8.8 percent after the chipmaker announced a multiyear agreement to supply processors to Meta Platforms to support its expanding AI operations. Under the deal, Meta also secured the right to purchase up to 160 million AMD shares at one cent each, depending partly on the volume of chips it ultimately buys.
The rally marked a turnaround from Monday’s selloff, which had been driven by concerns that AI could render parts of the software, logistics, and financial services sectors obsolete. Those fears triggered steep losses across industries seen as vulnerable to rapid automation.
IBM rose 2.7 percent after suffering its worst one-day drop since 2000 on Monday. The private equity sector also showed signs of stabilizing, with Blue Owl Capital gaining 2.8 percent as investors reassessed worries about loans tied to software firms reliant on recurring revenue.
On the technology front, Anthropic unveiled new business tools for its Claude AI assistant, targeting areas from human resources and engineering to investment banking. Analysts said the announcement suggested AI is more likely to enhance existing software ecosystems rather than replace them entirely.
One new tool allows financial market data from FactSet Research Systems to be integrated into Claude, sending FactSet shares up 5.9 percent, one of the largest gains in the S&P 500. Despite the jump, the stock remains down more than 30 percent for the year.
Other firms that had been hit hard by AI-related fears also rebounded. Salesforce advanced 4.1 percent, while AppLovin gained 3.3 percent.
Outside the AI sector, earnings reports continued to support the market. Keysight Technologies soared 23.1 percent after posting stronger-than-expected quarterly profit and revenue and forecasting a roughly 30 percent year-over-year increase in current-quarter revenue. Home Depot rose 2 percent after beating analysts’ expectations despite what its CEO described as ongoing consumer uncertainty.
By the close, the S&P 500 added 52.32 points to 6,890.07. The Dow climbed 370.44 points to 49,174.50, and the Nasdaq composite rose 236.41 points to 22,863.68.
Markets overseas were mixed. European indexes moved modestly, while Asia saw sharper swings, with South Korea’s Kospi jumping 2.1 percent and Hong Kong’s Hang Seng falling 1.8 percent. Shanghai stocks rose 0.9 percent after reopening from an extended holiday.
In the bond market, Treasury yields were steady after data showed U.S. consumer confidence improved more than expected. The yield on the 10-year Treasury note held at 4.03 percent.
