S&P 500 Edges Higher as SpaceX and Super Micro Spark AI Rebound, Wall Street Braces for Tesla and Meta Results

NEW YORK — U.S. stocks rose modestly in early trading Wednesday. Strong results from SpaceX and Super Micro Computer revived interest in artificial intelligence stocks ahead of earnings from Tesla and Meta Platforms after the close.

The S&P 500 was up 0.2% at 7,728.00 shortly after the opening bell, a gain of about 15 points from Tuesday's close of 7,712.57. The Dow Jones Industrial Average rose about 105 points, or 0.2%, to 52,600.66. The Nasdaq composite gained 0.6%.

AI trade gets a lift

Technology stocks led the advance after two closely watched reports Tuesday evening reassured investors that spending on AI infrastructure remains strong.

SpaceX, the rocket and satellite company that went public in June, reported third-quarter revenue of $14.58 billion. That was up 161% from a year earlier and well above analysts' forecasts. Its AI cloud business grew about ninefold. CEO Elon Musk also said SpaceX and Tesla have formed special committees of independent directors to study a possible merger. SpaceX shares rose about 9% in early trading, and Tesla gained about 3%.

Super Micro Computer, which builds AI servers, said revenue for its latest quarter would be $18.5 billion to $19.5 billion, about $4 billion more than its own forecast. Its shares jumped more than 13%. Dell Technologies, Hewlett Packard Enterprise and data center equipment maker Vertiv also rose.

The gains followed a difficult period for tech stocks. Last week, rising bond yields, a hotter-than-expected inflation report and worries about how companies will finance huge AI projects led to a sharp selloff. The S&P 500 fell 1.1% on Friday alone.

Mixed earnings elsewhere

Not every company was rewarded. Netflix fell about 6% in premarket trading after its quarterly report, and Intuitive Surgical dropped more than 7% before the opening bell.

Earnings season is now busy. AT&T, NextEra Energy and Abbott Laboratories were scheduled to report Wednesday morning. Tesla, Meta and IBM report after the market closes.

Tesla's results will get extra attention because of the possible merger with SpaceX. Meta's report will be watched for spending plans on AI data centers, which have become a major driver of the market this year.

Breadth improves

Tuesday's session showed a shift beneath the surface. The S&P 500 rose 0.3%, but an equal-weighted version of the index gained more than 1%. That meant the average stock did better than the large technology companies that dominate the index's value. The Dow rose about 530 points, or 1%, while the Nasdaq ended almost unchanged.

The Cboe Volatility Index, a measure of how much turbulence investors expect, fell about 6% to 17.31 on Tuesday.

Strategists have warned that the market has become too dependent on a small group of AI winners. "If you look at the breadth of the market, it's been terrible," Morgan Stanley strategist Mike Wilson said on CNBC on Tuesday.

Rates and oil remain risks

Bond yields remain high and continue to pressure stocks. The 10-year Treasury yield ended Tuesday at 5.12%, down 3 basis points but close to its highest level in more than two decades. Earlier this month, it rose to about 5.34% intraday, its highest since 2002.

The Federal Reserve raised interest rates in September for the first time since 2023. A report last week showed consumer prices rose 3.7% in September from a year earlier. Traders now see a strong chance of another rate increase by December.

Oil prices are adding to inflation concerns. Brent crude, the international benchmark, rose above $110 a barrel Wednesday after Iran's Revolutionary Guard said its naval mines hit three tankers trying to cross the Strait of Hormuz. The U.S. military rejected that claim. Iran has largely blocked shipping through the strait since the war with the United States and Israel began in February.

Lower oil prices helped stocks on Tuesday, when Brent reversed from near $112 to settle around $108.79.

Where the index stands

Despite recent swings, the S&P 500 is still up about 12% this year. The index is below levels it reached earlier this month, when it traded above 7,800 before last week's selloff.

Investors will look to Tesla and Meta's results tonight, and to more reports from major tech companies over the next two weeks, to see whether AI spending can keep supporting stocks while interest rates stay high.