FX.co ★ US Stocks Inch Higher

US stock indices edged higher on Wednesday, marking a third consecutive session of modest gains following last Thursday's sharp selloff, as markets reassessed the implications of AI-driven disruption for the technology sector. The three major averages each rose by less than 0.3%.

Investors had begun to question whether the surge in AI infrastructure spending by the largest US tech firms will translate into sufficiently higher revenues to justify this year’s lofty valuations in mega-cap stocks. Nvidia advanced nearly 2%, building on the prior session’s rebound after Meta said it would deploy millions of Nvidia chips in its new data center. Amazon and Micron also rallied, supported by disclosures that major asset managers had increased their stakes in both companies.

In contrast, AMD fell nearly 4%, while Palo Alto Networks slumped 10% after issuing earnings guidance that came in below market expectations. Expectations that the Federal Reserve will deliver interest rate cuts later this year also underpinned equities ahead of the release of the latest FOMC meeting minutes later today.