AI cheer banishes rate hike fear
SPY•US stocks jumped and Europe closed at a record high on Wednesday, as a positive outlook for AI-related business from CoreWeave helped lift its shares 20% and Nvidia shares rebounded, outweighing concern about a possible 50-basis-point Federal Reserve rate hike next month.
1. Stocks rally on AI optimism
US stocks rose and Europe’s STOXX 600 closed at a record 663.05 points on Wednesday. CoreWeave shares surged 20% and Nvidia rebounded, helping lift the Nasdaq 1.6%, the S&P 500 1.3% and the Dow 0.5%. Semiconductor shares gained 5.6%.
2. Rate concerns remain
The rally came despite concern that the Federal Reserve could raise rates by 50 basis points next month, after Governor Chris Waller put that possibility on the table Tuesday. The dollar index reached its highest level since April 2025, while the dollar neared 160 yen.
3. Europe earnings broaden
With roughly half of STOXX 600 companies reporting, third-quarter earnings were tracking about 24% higher year on year, according to Nuveen. Excluding energy and technology, growth was around 10%; energy, AI-exposed technology and financials accounted for roughly 85% of aggregate earnings growth.
