The S&P 500 moved higher on Wednesday as major AI stocks rebounded and investor confidence increased on growing expectations that the Federal Reserve will deliver another rate cut next month. By early afternoon, the Dow Jones Industrial Average was up 426 points, or 0.9%. The S&P 500 gained 0.9%, and the Nasdaq Composite rose 1%.
AI-linked stocks helped lead the advance. Nvidia and Oracle both recovered some of their recent losses after Deutsche Bank said concerns about Oracle’s outlook were overstated and that the company’s valuation does not fully reflect the potential benefits of its partnership with OpenAI.
Dell Technologies also supported the sector. Its shares climbed after the company issued a strong fourth-quarter forecast, driven by accelerating demand for AI servers built with Nvidia chips. Dell now expects fourth-quarter revenue between $31 billion and $32 billion, well above prior estimates. The company also raised its fiscal 2026 revenue outlook to between $111.2 billion and $112.2 billion and increased guidance for adjusted earnings per share to $9.92.
Not all tech names advanced. HP shares fell after the company issued weak guidance and announced plans to cut 10% of its workforce. Broader tech and AI-focused stocks have faced heavy selling throughout November as investors worried about stretched valuations and the risk of an AI-driven market bubble.
Outside the technology sector, Deere & Company slipped after reporting lower fourth-quarter profit due to weaker margins in its agricultural equipment division. In contrast, Urban Outfitters surged, reporting more than 12% year-over-year sales growth for the third quarter, hitting a record $1.53 billion.
Market sentiment improved further as investors grew more confident that the Federal Reserve will cut interest rates in December. Several Fed officials have recently signaled support for easing policy. Softer-than-expected retail sales in September and a sharp jump in weekly jobless claims added to expectations of slowing economic activity. Markets now see more than an 80% chance of a 25-basis-point rate cut at the Dec. 9–10 meeting, up from roughly 40% a week earlier.
Attention is also turning to the upcoming release of the Federal Reserve’s Beige Book. Analysts at ING noted that the report provides key anecdotal insights into economic conditions and effectively replaces the delayed third-quarter GDP report. The previous Beige Book suggested mostly steady economic activity but highlighted emerging signs of softening, including rising layoffs and weaker spending among lower- and middle-income households.
The Fed will also review more inflation data before December’s policy meeting. The PCE price index for September, originally expected this week, has been rescheduled for release on Dec. 5, according to the Bureau of Economic Analysis.
Adding to expectations of rate cuts, U.S. Treasury Secretary Scott Bessent said he was completing a second round of interviews for a new Federal Reserve chair. He indicated that President Donald Trump may announce his choice before Christmas. White House adviser Kevin Hassett is seen as a leading candidate and has publicly supported lower interest rates, aligning with Trump’s stance.
