Rebounding tech stocks drove US indexes higher Tuesday, a day after they tumbled on doubts about whether the artificial-intelligence frenzy really needs all the dollars being poured into it.
- The S&P 500 rose 55.42 points, or 0.9%, to 6,067.70 and clawed back more than half of its earlier drop.
- The Dow rose 136.77 points, or 0.3%, to 44,850.35.
- The Nasdaq composite rallied 391.75, or 2%, to 19,733.59. .
The spotlight remained on Nvidia, whose chips are powering much of the move into AI, the
AP reports. It climbed 8.8% after plunging nearly 17% the day before. Treasury yields held relatively steady ahead of an announcement coming Wednesday about what the Federal Reserve will do next with short-term interest rates. .
Other AI-related companies also held steadier, including chip company Broadcom, which rose 2.6%. Constellation Energy climbed 1.4% after plummeting 20.8% on Monday. It had rallied in recent months on expectations it will help supply the electricity that vast AI data centers would gobble up. Such revenues are under threat after DeepSeek, a Chinese company, said it was able to develop a large language model that can perform as well as big US rivals but at fraction of the cost. That raises questions about whether all the spending expected for AI chips and electricity will need to happen.
Outside of AI-related industries, stocks held up fairly well on Monday, and they were mixed Tuesday following a set of mixed profit reports. Royal Caribbean steamed 12% higher after the cruise operator topped analysts' profit expectations for the end of 2024. The company also gave a profit forecast for the first three months of 2025 that topped analysts' expectations. JetBlue Airways, meanwhile, lost more than a quarter of its value, 25.7%, despite reporting a milder loss for the latest quarter than analysts expected. The company said it expects its costs outside of fuel to rise more quickly at the start of 2025 than a key underlying measure of its revenue.
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