US stocks rise after getting a reminder of AI's potential upsides
[February 25, 2026] By
STAN CHOE
NEW YORK (AP) — U.S. stocks rose Tuesday after getting a reminder that
the artificial-intelligence boom may also have an upside.
The S&P 500 climbed 0.8% and recovered nearly three-quarters of its
sharp drop from the day before. The Dow Jones Industrial Average added
370 points, or 0.8%, and the Nasdaq composite gained 1%.
Advanced Micro Devices helped lead the market and rallied 8.8% after
announcing a multiyear deal where it will supply chips to Meta Platforms
to help power its AI ambitions. Under the agreement, Meta also got the
right to buy up to 160 million shares of AMD stock for 1 cent each,
depending in part on how many chips Meta ultimately buys.
It’s a reminder of the excitement that built in recent years about the
billions of dollars pouring into AI, which could remake the world and
create a more productive economy.
It also helped produce a sharp turnaround from the prior day, when
worries about the potential downsides of AI shook Wall Street,
particularly companies and industries that investors fear could be made
obsolete. Industries as far flung as software, trucking logistics and
financial services have recently seen investors suddenly and
aggressively punish them for potentially being under threat.
IBM rose 2.7% to recover some of its 13.1% drop from Monday, which was
its worst since 2000.
The pain has also filtered out to the private-equity industry, with
fears building that loans it made to software companies dependent on
recurring revenue may have less of a chance of getting repaid. Blue Owl
Capital rose 2.8% to trim its loss for the young year so far to 28.2%.
On Tuesday, Anthropic unveiled new tools for businesses to use with its
Claude AI assistant. They covered everything from human-resources work
to engineering to investment banking.
The event suggested that fears about AI supplanting existing software,
rather than merely making it easier to use, may be overblown, according
to Dan Ives, an analyst at Wedbush. “While these use cases are
impressive, the reality is that these new AI tools will not rip and
replace existing software ecosystems and data environments with these AI
tools only as useful as the data it can reach.”
One of the tools allows users to bring data on financial markets from
FactSet into Claude. FactSet Research Systems’ stock jumped 5.9% for one
of the biggest gains in the S&P 500, though it’s still down 30.6% for
the year so far.
[to top of second column] |
Snow falls outside the New York Stock Exchange, Monday, Feb. 23,
2026, in New York. (AP Photo/Seth Wenig)
 Other companies hit hard by worries
about AI competition also trimmed their losses for the year.
Salesforce climbed 4.1%, and AppLovin rose 3.3%.
Outside of AI worries, big U.S. companies continued to report mostly
better profits for the end of 2025 than analysts expected.
Keysight Technologies rallied 23.1% for the biggest gain in the S&P
500 after topping analysts’ expectations for profit and revenue in
the latest quarter. It also said revenue in the current quarter
could rise by roughly 30% from a year earlier.
Home Depot rose 2% after likewise delivering stronger profit and
revenue than analysts expected. That was even with what CEO Ted
Decker called “ongoing consumer uncertainty.”
All told, the S&P 500 rose 52.32 points to 6,890.07. The Dow Jones
Industrial Average added 370.44 to 49,174.50, and the Nasdaq
composite climbed 236.41 to 22,863.68.
In stock markets abroad, indexes were mixed in Europe amid mostly
modest movements.
The swings were larger in Asia. South Korea’s Kospi jumped 2.1%,
while Hong Kong’s Hang Seng dropped 1.8%. Stocks in Shanghai rose
0.9% after reopening following a holiday of more than a week.
In the bond market, Treasury yields held relatively steady after a
report said that confidence among U.S. consumers improved by more
than economists expected. The yield on the 10-year Treasury held at
4.03%, where it was late Monday.
___
AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
All contents © copyright 2026 Associated Press. All rights reserved
 |
