U.S. stocks pushed higher Wednesday, briefly pushing the S&P 500 above the historic 7,000 mark as enthusiasm around artificial intelligence continued to ripple through markets ahead of the Federal Reserve’s latest policy decision.
The S&P 500 hovered near flat after touching the milestone following a record close, while the Nasdaq Composite edged up roughly 0.1% as chip stocks held modest gains. The Dow Jones Industrial Average also added about 0.1%, supported by industrials and select financials as investors weighed economic resilience against lingering rate uncertainty.
Market Movers:
- Nvidia (NVDA) +1.3%: Shares rose as optimism around sustained AI infrastructure spending intensified following strong signals from ASML’s record order book. Investors also reacted to reports that China approved large imports of Nvidia’s H200 GPUs, reinforcing demand visibility for advanced accelerators.
- Microsoft (MSFT) -0.4%: Microsoft traded lower ahead of earnings due after the close, with investors cautious around near-term margins as AI-driven data center investments ramp. Markets are looking for updates on Azure growth and capital expenditure discipline.
- Meta Platforms (META) -0.6%: Meta slipped as traders positioned defensively ahead of its quarterly report, which is expected to highlight continued heavy spending on AI and metaverse initiatives. Advertising trends and guidance around 2026 operating costs remain in focus.
- Seagate Technology (STX) +15%: Shares surged after the storage provider delivered results and guidance well above expectations, citing accelerating AI data center demand. Management pointed to agentic AI as a key driver of future storage needs, fueling a sharp re-rating of the stock.
- Intel (INTC) +10%: Intel rallied on reports that Nvidia may use Intel’s foundry services for select future workloads, alongside insider buying by the company’s CFO. The developments boosted confidence in Intel’s long-term foundry strategy and execution roadmap.
AI Trade Stays in the Driver’s Seat
AI remained the market’s main theme, with chip stocks broadly higher after ASML reported record orders that underscored the durability of AI-related capital spending. Comments from ASML’s leadership reinforced the idea that customers are planning for multi-year AI demand rather than a short-lived surge, helping lift sentiment across semiconductors and adjacent hardware names.
Beyond chips, investors are closely watching how Big Tech balances aggressive AI investment with profitability. Results from Microsoft, Meta, and Tesla after the bell are expected to shape near-term market direction, particularly for the Nasdaq.
Fed Decision and Dollar Moves Add Tension
Markets are also bracing for the Federal Reserve’s first rate decision of the year, with policymakers widely expected to hold rates steady. Attention will be squarely on Chair Jerome Powell’s press conference for clues on the timing and pace of potential rate cuts, as futures markets currently price in two quarter-point reductions by the end of 2026.
Meanwhile, recent weakness in the U.S. dollar has added another layer of complexity. The dollar stabilized Wednesday after sliding to multi-year lows earlier in the week, with investors weighing the implications for inflation, commodities, and global capital flows.
Looking Ahead
With the S&P 500 testing uncharted territory, markets appear poised for volatility as earnings season and central bank guidance collide. Big Tech results over the next 48 hours, followed by Apple’s report later in the week, could determine whether the AI-driven rally has further room to run or faces a near-term pause. For now, investors remain focused on whether strong earnings and a patient Fed can justify elevated valuations as 2026 unfolds.