The S&P 500 and Nasdaq hit record highs on Tuesday as AI stocks led, per Al Jazeera. Strategists cite rates as the main risk. Not investment advice. #Stocks #Nasdaq #AIInvesting
AI stocks pushed Wall Street to a record on Tuesday, and strategists say the rally could run through year-end.
The S&P 500 closed 0.58% higher, topping its mid-August peak, Al Jazeera reports. The Nasdaq Composite also hit a record, finishing up 0.45%.
Which Stocks Led the Rally?
Tech led. Every “Magnificent Seven” stock except Meta closed higher.
Amazon gained 1.95%, Microsoft 0.78% and Tesla 0.51%. Apple and Alphabet each rose 0.22%, and Nvidia added 0.14%.
Meta fell 0.41%, even though its shares have risen more than 20% since last month’s launch of its AI assistant, Muse.
Outside the mega-caps, Marvell Technology rose 5.81% and Cisco gained 4.54%.
For the year, the S&P 500 is up 14% and the Nasdaq Composite is up 18.78%. The market is on track for a fourth straight year of double-digit returns.
What Do Strategists Say?
Keith Lerner, chief investment officer and chief market strategist at Truist Advisory Services, calls it a “technology and AI surge.”
“Every bull market has a dominant theme, and technology and AI remain this market’s dominant theme,” he told Al Jazeera.
Lerner noted that technology and communication services were the only two S&P 500 sectors to rise last month. The other nine declined.
Lerner said the rally could continue through the end of 2026, given historical trends and expectations for strong corporate earnings.
“Still, on balance, the weight of the evidence suggests this bull market still has more upside potential,” he said.
He also cited history. The fourth quarter of a midterm-election year has averaged a 7% gain and been positive 84% of the time since 1950.
Hyperscalers keep investing billions in AI, and Wall Street has shrugged off several challenges, Al Jazeera notes.
Lochlan Halloway, a senior equity strategist at Morningstar Australia, is also positive. “We are positive on AI too,” he told Al Jazeera. Investors “are betting that the money pouring into data centres will earn a good return,” he said.
Where Is the Risk?
Both strategists flag limits. Lerner said rising interest rates pose the biggest risk. “We do not expect a straight line higher for markets,” he said.
Halloway added that the belief has so far outweighed rising interest rates, pricier oil and that bond yield above 5%.
Halloway pointed to concentration. “The range of outcomes is wide, and the market is concentrated in a handful of companies,” he said.
The backdrop is not calm. Brent crude stood at $101.16 a barrel on Wednesday, and the 10-year bond yield sits above 5%, per Al Jazeera.
Asian markets fell on Wednesday. The Kospi dropped 1.98%, the Nikkei 225 fell 0.92% and the Hang Seng slipped 0.57%.
Which AI Stocks Have Miami Ties?
Miami has its own corner of this trade. SharonAI, a GPU compute and cloud AI company headquartered on Collins Avenue in Miami Beach, listed on Nasdaq in February with a $125 million IPO.
SharonAI also announced a five-year, $1.25 billion agreement with India’s ESDS Software Solutions for an 8,000-GPU cluster in an Australian data center. MAIN noted that contract value is not revenue.
Globant employs people in Miami and bought Miami-based fintech engineering firm Blankfactor in 2024. Intapp counts Miami Beach’s Starwood Capital Group and the Miami office of Jackson Lewis P.C. among its customers.
MAIN detailed those links in Miami AI Stocks: Globant, SharonAI and Intapp’s Local Ties. It is general commentary, not investment advice.
The three companies connect to Miami in different ways. Globant employs people there, SharonAI is headquartered there and Intapp serves clients there.
A talent pipeline is also coming. After Ken Griffin’s $3 billion pledge, Carnegie Mellon plans a Wynwood campus enrolling students from 2028. See Carnegie Mellon’s $3B Griffin gift.
The rally rests on one story. If AI spending keeps paying off, the records continue.
Sources:
- Al Jazeera: US stock market hits all-time high as investors continue to bet on AI, John Power
- MAIN: Miami AI Stocks: Globant, SharonAI and Intapp’s Local Ties
Not investment advice.