US Stocks Rise as Tech Rally Votes Boost Confidence

U.S. stocks climbed higher on Wednesday, lifted by renewed strength in technology shares and growing optimism that the nation’s record-breaking government shutdown could soon come to an end.

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By midmorning in New York, the S&P 500 Index was up 0.1%, on track for a fourth consecutive day of gains, supported in part by a surge in Advanced Micro Devices Inc. (AMD). The chipmaker’s upbeat sales forecast sparked investor enthusiasm across the tech sector. However, the Nasdaq 100 Index, dominated by tech giants, slipped 0.1% in early trading.

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“We saw an ‘everything but tech’ rally yesterday, but this morning tech is back in the driver’s seat,” said Matt Maley of Miller Tabak. “It seems investors aren’t as worried about the ongoing costs of AI development as Michael Burry appears to be.”

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AMD, Nvidia Corp.’s closest competitor in artificial intelligence chips, jumped 6.2% after projecting stronger revenue growth over the next five years. The company expects increasing demand for its data center products to power that momentum. The update reassured investors amid mounting doubts about whether the current wave of heavy AI-related spending is sustainable.

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The renewed confidence comes as valuations of major tech stocks especially those that have soared on AI enthusiasm since April are being questioned. Just last week, hedge fund manager Michael Burry revealed short positions against both Palantir Technologies Inc. and Nvidia, sparking speculation that the AI-driven rally may be losing steam.

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While the Nasdaq 100 ended Tuesday’s session in negative territory, it managed to recover most of an earlier 0.9% decline. Nvidia was among the day’s biggest drags after SoftBank Group Corp. sold its entire stake in the company to raise funds for new AI ventures. Nvidia shares slipped another 0.1% on Wednesday.

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“Market corrections are a natural and healthy part of investing, but investors will watch closely to ensure this doesn’t turn into a deeper sell-off,” said Russ Mould, investment director at AJ Bell. “We’re not there yet, but anticipation is building as Nvidia prepares to report third-quarter earnings.”

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Despite a solid year overall, the S&P 500 continues to lag behind many global benchmarks. Analysts at Goldman Sachs Group Inc., who accurately forecasted this year’s U.S. underperformance, expect the trend to persist for years to come.

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“Investors should diversify beyond the U.S., favoring emerging markets,” wrote Peter Oppenheimer and his team in a note. “We see stronger nominal GDP growth and reform momentum benefiting emerging economies, while AI’s long-term gains are likely to spread globally rather than being concentrated in U.S. tech.”

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Meanwhile, lawmakers in the U.S. House are set to return to Washington on Wednesday for a critical vote to end the 43-day government shutdown the longest in American history. The impasse has disrupted air travel, delayed paychecks for federal workers, and slowed the distribution of food assistance to millions. It has also postponed official economic data releases, forcing investors to rely more heavily on private reports to assess the economy’s strength.

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Historically, resolutions to government shutdowns have boosted the S&P 500 and most of its sectors, based on median performance following past events.

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Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management, said that while markets have largely priced in the shutdown’s effects, the real test will come once official economic data returns.

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“The market’s been flying blind without data,” Landsberg explained. “As the fog clears, we’ll find out whether investors were correctly positioned or if the incoming information prompts a significant repricing.”

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Among individual stock movers, On Holding AG surged after the Swiss sneaker company raised its annual sales forecast on stronger-than-expected third-quarter earnings. Meanwhile, restaurant chains Cava Group Inc. and Sweetgreen Inc. both gained after being added to Citigroup Inc.’s 90-day positive catalyst watch list. Citigroup analysts expect both companies to benefit from improving consumer demand once the government fully reopens.

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Overall, investor sentiment remains cautiously upbeat. The combination of easing political uncertainty, optimism around corporate growth stories like AMD’s, and the expectation that Washington will soon resume normal operations has kept Wall Street’s mood relatively positive. Still, with AI valuations high and a flood of delayed economic data set to arrive, traders are preparing for a potentially volatile few weeks ahead.

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