AI drives Wall Street gains as Alibaba boosts investment

US stocks edged higher on Wednesday, paring back losses from the previous session as investors weighed the potential returns from substantial investments in artificial intelligence, alongside the outlook for long-term US interest rates. The S&P 500 and Nasdaq 100 posted modest gains, while the Dow Jones Industrial Average added 50 points. Companies in the AI sector advanced sharply after Alibaba announced plans to increase its AI investment beyond the initial US$50 billion pledge. Depository receipts for the Chinese tech giant surged by 8%, while shares in Nvidia and Meta both rose by nearly 1%.

London’s FTSE 100 climbed 0.30% on Wednesday, outperforming its European counterparts, driven by a strong rally in copper mining stocks. Antofagasta led the gains, rising 9.20%, after US competitor Freeport-McMoRan announced the suspension of operations at its large Indonesian copper mine, which is expected to reduce global copper and gold supply. This pushed copper prices above US$10 000 per tonne - the highest since 2024. As the FTSE 100’s only pure copper miner, Antofagasta outpaced diversified peers such as Anglo American, which rose by 4.20%, Glencore by 3%, and Rio Tinto by 1.10%.

European markets ended the day broadly unchanged, continuing the subdued trend seen throughout the week. Weakness in luxury stocks counteracted modest gains in other sectors, leaving both the Eurozone’s STOXX 50 and the pan-European STOXX 600 flat on the day. Shares in luxury giants such as LVMH, Hermès, Ferrari, L’Oréal, and EssilorLuxottica fell between 1.50% and 3%, reversing strong momentum from the previous session.

In Asia, Japan’s Nikkei 225 gained 0.30% to close at 45 630, while the broader Topix index added 0.23% to 3 170, rebounding from earlier declines. Technology shares led the recovery, bolstered by ongoing global enthusiasm for AI and foreign capital inflows. On the economic front, September’s PMI data showed manufacturing remained in contraction territory despite earlier forecasts for growth, while the services sector expanded at a slower pace.

Chinese markets also performed strongly, with the Shanghai Composite rising by 0.83% to 3 854 and the Shenzhen Component climbing 1.80% to 13 356 - marking a new three-and-a-half-year high - driven by strength in technology and new energy stocks. Investor sentiment improved amid signs of easing US-China trade tensions. However, US Ambassador to China, David Perdue, indicated that a much-anticipated meeting between President Donald Trump and President Xi Jinping is now more likely to take place next year rather than later this autumn.

In South Africa, financial markets were closed on Wednesday in observance of the Heritage Day public holiday.

Meanwhile, WTI crude oil futures extended gains to trade at US$64.60 per barrel, following a 1.80% increase in the previous session, after US crude inventories declined last week, heightening concerns over tightening supply. Gold prices also climbed, reaching around US$3 770 per ounce, approaching a new record high , as investors weighed recent commentary from the Federal Reserve alongside persistent geopolitical uncertainty.