US equities rally as AI infrastructure demand boosts chipmakers

US equities staged a broad-based recovery on Wednesday, with all three major indices closing higher. At 20h28 SAST, the S&P 500 rose 1.65% to 7 644.85, the Nasdaq Composite advanced over 2% to 25 625.79, while the Dow Jones Industrial Average gained 0.49% to 52 487.13. The rebound came as investors shifted their focus from Tuesday’s higher-than-expected inflation data to corporate earnings and growth prospects. 

Technology stocks led the gains, with the Information Technology sector rising around 2.90%, while semiconductor shares rallied strongly. Artificial intelligence (AI) infrastructure companies were among the top performers, led by CoreWeave, with shares surging more than 23% after reporting year-on-year revenue growth of $3.66 billion. The positive results also lifted other chipmakers, with Micron and Marvell Technology each gaining around 12%, Intel rising 9%, Broadcom adding 7%, while Nvidia advanced nearly 5%. 

However, the recovery was not uniform across the technology sector, as software companies faced renewed competitive concerns amid rapid advances in AI. Microsoft declined more than 2.30% after Anthropic introduced competing AI-powered office tools, while Meta Platforms slipped 0.91%. 

European equities advanced for a third consecutive session on Wednesday, supported by strong technology earnings. The Euro STOXX 50 rose 1% to 6 393, while the STOXX Europe 600 gained 0.70% to reach a new record high of 663.1. Regional markets also closed higher, with the UK’s FTSE 100 climbing 0.66% to 10 822.74, Germany’s DAX rising 1.14% and France’s CAC 40 adding 0.63%. 

Technology shares extended their recovery from last week’s sell-off, following positive results from US-based CoreWeave that helped ease concerns about whether rising debt levels among AI companies could limit further investment. Sentiment was further supported by Siemens Energy, which reported stronger profits and margins on the back of growing data-centre demand and raised its outlook. This lifted shares across the AI infrastructure sector, with ASML and Infineon gaining 3.02% and 6.40%, respectively. Banking stocks also maintained their upward momentum, with Deutsche Bank rising 2% and ING adding 1.30%. 

Asian equity markets closed mixed on Wednesday, as renewed optimism around the AI sector was tempered by concerns over the US interest rates outlook. Japan’s Nikkei 225 rose 1.31% to 61 248.59, supported by strength in technology shares, while Hong Kong’s Hang Seng Index declined 1.11% to 24 285.10. The contrasting performance reflected differing investor responses to the renewed enthusiasm for AI and concerns that persistent inflation could keep US interest rates higher for longer. 

South African equities ended broadly lower, with the JSE All Share Index declining 1.08% to 113 450 points and the Top 40 slipping 1.11% to 105 558 points. Sector performance was also largely negative, with Industrials 25 falling 1.15% and Financials 15 losing 0.93% as major banking shares came under pressure. Naspers declined 3.02%, alongside losses in Prosus, while retailers also recorded notable declines, led by Woolworths. Weakness across the metals and mining sector weighed on the Resources 10 Index, which fell 1.44%. Sasol bucked the broader market trend, gaining 2.38% as firmer oil prices supported the share price. At 21h29 SAST, the rand was weaker against the US dollar at R16.59, but firmer against the pound at R22.03 and the euro at R18.41. 

Brent crude rebounded 2.07% to US$93.38 a barrel on Wednesday, recovering from a 10-week low as persistent tensions in the Middle East and limited progress in peace negotiations continued to fuel uncertainty over supply prospects. Precious metals traded mixed, with gold declining 1.03% to $3 989.22 an ounce, while silver advanced 0.71% to $51.87 and ounce.