Wall Street Rises As Tech Stocks Recoup Some Losses

The main US indexes advanced on Wednesday as technology shares recovered some lost ground after an AI-led selloff, while investors awaited minutes from the Federal Reserve’s most recent policy meeting later in the day.

Worries that rapidly improving artificial-intelligence tools could disrupt business models rocked US stocks this month, leading to declines in sectors from software to trucking. 

The S&P 500 software and services sector, opens new tab, which saw heavy selling earlier this month, rose 1.4 percent, boosted by a 9.5 percentadvance in Cadence Design Systems opens new tab after the chip-design software provider beat fourth-quarter revenue estimates. Some concerns remained as cybersecurity company Palo Alto Networks opens new tab dropped 6.3 percent after trimming its annual profit forecast.

Broader AI-linked and megacap technology stocks had lost ground earlier this month as investors demanded stronger evidence the heavy investments in the technology were tangibly boosting revenue and profits.

Most megacap and growth stocks rose on the day, with Nvidia opens new tab gaining 2.6 percent after the company said it had signed a multi-year deal to sell Meta Platforms opens new tab millions of its current and future AI chips.

Other megacaps also rose. Amazon.com opens new tab was up 2.3 percent, while Alphabet opens new tab and Microsoft opens new tab gained about 1 percent each. “Figuring out the winners and losers in AI is likely to be a center theme in 2026. While AI is very promising, investors should not assume that all companies will win on the AI front,” said Paul Stanley, chief investment officer at Granite Bay Wealth Management.

Seven of the 11 S&P sub-sectors were on the rise, with information technology opens new tab and consumer discretionary opens new tab leading gains.

Real estate , opens new tab and utilities opens new tab were laggards, each losing more than 1 percent.

At 11:25 am ET, the Dow Jones Industrial Average opens new tab rose 280.48 points, or 0.56 percent, to 49,813.67, the S&P 500 opens new tab gained 58.89 points, or 0.86 percent, to 6,902.11, and the Nasdaq Composite opens new tab was up 294.79 points, or 1.31 percent, to 22,873.17.

Minutes from the Fed’s January policy meeting, where it held its main lending rate steady, are expected at 2 pm ET and could offer more clues on the future path of interest rates. 

Traders are pricing in a roughly 63 percent chance of a rate cut of at least 25 basis points at the Fed’s June meeting, the first with odds above 50 percent, according to CME’s FedWatch Tool.