NEW YORK (AP) — The U.S. stock market is rising on Tuesday after getting a reminder that the artificial-intelligence technology boom may also have an upside.
The S&P 500 rose 0.6%, a day after dropping 1%. The Dow Jones Industrial Average was up 353 points, or 0.7%, as of 11:30 a.m. Eastern time, and the Nasdaq composite was 0.9% higher.
Advanced Micro Devices helped lead the market and climbed 7.3% after announcing a multiyear deal where it will supply chips to help power Meta Platforms’ AI ambitions. Under the agreement, Meta also got the right to buy up to 160 million shares of AMD stock for 1 cent each, depending in part on how many chips Meta ultimately buys.
It’s a reminder of the excitement that built in recent years about the billions of dollars pouring into AI, which could remake the world and create a more productive economy.
Recently, though, investors have begun to focus more on the potential downsides of AI and how it could undercut profits for certain companies and industries or even make them obsolete. Industries as far flung as software, trucking logistics and financial services have seen investors suddenly and aggressively punish them for potentially being under threat.
IBM rose 3.9% Tuesday to recover a chunk of its 13.1% drop from the prior day, which was its worst since 2000.
The pain has also filtered out to the private-equity industry, with fears building that loans it made to software companies dependent on recurring revenue may have less of a chance of getting repaid. Blue Owl Capital fell 1.8% to bring its loss for the young year so far to 31.4%.
On Tuesday, Anthropic unveiled new AI tools that businesses can use with its Claude product. They covered everything from human-resources work to engineering to investment banking.
The event suggested that fears of AI supplanting the software industry may be overblown, according to Dan Ives, an analyst at Wedbush. “While these use cases are impressive, the reality is that these new AI tools will not rip and replace existing software ecosystems and data environments with these AI tools only as useful as the data it can reach.”
One of the tools allows users to bring data on financial markets from FactSet into Claude. FactSet Research Systems' stock jumped 6% for one of the biggest gains in the S&P 500, though it's still down roughly 30% for the year so far.
S&P Global rose 2.8%, and MSCI added 2% after Anthropic unveiled similar connectors and plug-ins for their offerings.
Outside of AI worries, big U.S. companies continue to report mostly better profits for the end of 2025 than analysts expected.
Keysight Technologies rallied 23% for the biggest gain in the S&P 500 after topping analysts’ expectations for profit and revenue in the latest quarter. It also said revenue in the current quarter could rise by roughly 30% from a year earlier.
Home Depot rose 3% after likewise delivering stronger profit and revenue than analysts expected. That was even with what CEO Ted Decker called “ongoing consumer uncertainty.”
They helped offset a 1.4% drop for Coinbase Global. The crypto trading platform fell as bitcoin dropped back below $64,000, close to half its record price reached in October.
In stock markets abroad, indexes rose modestly in Europe.
The swings were larger in Asia. South Korea’s Kospi jumped 2.1%, while Hong Kong’s Hang Seng dropped 1.8%. Stocks in Shanghai rose 0.9% after reopening following a holiday of more than a week.
In the bond market, Treasury yields held relatively steady after a report said that confidence among U.S. consumers improved by more than economists expected. The yield on the 10-year Treasury remained at 4.03%, where it was late Monday.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.