US stocks finished mostly higher on Tuesday as upbeat corporate earnings and falling oil prices supported investor sentiment, offsetting continued concerns about the sustainability of artificial intelligence investment.
The Dow Jones Industrial Average jumped 529.85 points, or 1.02%, to 52,495.88, while the S&P 500 gained 0.28% to 7,712.57. The Nasdaq Composite edged down 0.02% to 26,424.82.
Industrial stocks led the gains, with 3M climbing more than 5% after reporting better-than-expected earnings and raising its full-year guidance. Northrop Grumman advanced more than 4% following stronger-than-expected quarterly results.
Technology stocks recovered some earlier losses, although concerns about AI infrastructure spending and rising debt levels continued to weigh on the sector.
Western Digital gained more than 3%, Seagate Technology rose over 2%, while CoreWeave and Marvell Technology each advanced more than 1%.
The recovery followed last week’s sharp technology sell-off, with investors increasingly focused on whether AI companies can generate sufficient returns to justify substantial capital expenditure.
Oil prices retreated amid renewed hopes for progress towards ending the Iran war. West Texas Intermediate crude fell 1.8% to US$101.79 a barrel, while Brent declined 0.7% to US$108.79. US Treasury yields also eased, providing additional support to equities.
Australian Market Outlook
Australian shares are set to open higher, with S&P/ASX 200 futures up 31 points, or 0.4%, to 8,866.
The stronger lead follows gains across major US benchmarks and a pullback in oil prices, which helped ease concerns about inflation and the outlook for interest rates.
However, sentiment towards technology stocks remains cautious following recent volatility in AI-related companies. South Korean cloud computing company Elice plunged 32% on its market debut, highlighting investor concerns about valuations and the financing of AI infrastructure.
Investors will also assess fresh developments in the AI sector, including SpaceX’s reported 161% increase in third-quarter revenue and reports of substantial first-half losses at Anthropic.
Locally, attention will remain on technology, energy and resources stocks, alongside movements in global bond yields and oil prices.
