After losing more than one percent on Monday, major US indices began tentatively on Tuesday before catching their stride later in the morning. The tech-rich Nasdaq led Wall Street indices with a one-percent gain, while the Dow and S&P 500 also finished solidly higher.
“Today tech is really catching a break from the AI disruption narrative,” said Angelo Kourkafas of Edward Jones, who also pointed to a big Meta deal secured by semiconductor company AMD.
“Both of these developments and news headlines on the tech space are helping recover some of yesterday’s losses,” Kourkafas said.
Besides AI, markets have been assimilating the after-effects of the Supreme Court’s move last week to strike down many of US President Donald Trump’s tariffs.
Right after the ruling, Trump announced new levies at 10 percent, under a different legal authority. Trump has vowed to raise this level to 15 percent, with exclusions expected to remain for goods covered by sector-specific arrangements and the US-Mexico-Canada trade pact.
However, the move has raised questions about other trade deals Washington has agreed since Trump’s tariff blitz in April, with the European Union demanding clarity on the issue before ratifying its agreement with the United States.
Trump is scheduled to address Congress in the annual State of the Union speech on Tuesday night that will likely include discussion of tariffs and other economic issues.
The market’s Jekyll-and-Hyde attitude towards AI shifted on Tuesday after an announcement that tech giant Meta had reached an agreement to purchase millions of chips from processor manufacturer AMD, in which it could become a shareholder.
Shares in AMD jumped 8.8 percent, while Meta rose 0.3 percent.
Sentiment had been dampened by renewed concerns about the impact of artificial intelligence on the tech sector, with software firms again in the firing line.
The latest blow came from a report on Sunday by Citrini Research that used possible scenarios set in the future showing parts of the global economy that could be at risk from new tools, such as credit card and food delivery firms.
But investors adopted a more sanguine view of the situation on Tuesday following a presentation by AI company Anthropic that emphasised the compatibility of its technology with existing programmes, analysts said.
“The reality is that these new AI tools will not rip and replace existing software ecosystems and data environments,” said a note from Wedbush Securities, noting that the tools were only as useful as the data they could use.
“AI is more likely to drive a modernisation cycle than bypass the installed base.”
Shares in Danish drugmaker Novo Nordisk, which is struggling with competition for its anti-obesity treatments, fell 3.1 percent after it announced it would sharply cut prices for its flagship drugs in the US, announcing a 50-percent cut for Wegovy and 35 percent for Ozempic.
The S&P 500 rose 0.8 percent, to 6,890, the Dow also rose 0.8 percent, to 49,174, while the Nasdaq rose 1 percent, to 22,863. (AFP)
Edited by Cecil Wong
