U.S. stocks rebounded Tuesday after investors shifted attention back to potential upside in artificial intelligence, helping major indexes recover from the prior day’s selloff. The S&P 500 rose 0.8% to 6,890.07, and the market “recovered nearly three-quarters” of the sharp drop from Monday, when worries about potential downsides of AI shook Wall Street.
The renewed buying came alongside fresh company news tied to AI and earnings, with several AI-adjacent stocks reversing at least part of their earlier pressure. Advanced Micro Devices led the market gain, rallying 8.8% after it announced a multiyear deal to supply chips to Meta Platforms to support Meta’s AI ambitions. The agreement also gives Meta the right to buy up to 160 million shares of AMD stock for 1 cent each, with the option depending in part on how many chips Meta ultimately buys.
Meta’s chip partnership and the broader technology narrative supported a sharp turnaround for investors who had recently punished industries they feared could be made obsolete by AI. Those concerns had extended beyond software to areas such as trucking logistics and financial services, and the selloff “filtered out” to Wall Street’s private-equity industry, where Blue Owl Capital rose 2.8% to trim its loss for the year so far to 28.2%.
Some companies that had taken heavy losses earlier in the week also climbed Tuesday. IBM rose 2.7% as it tried to recover from Monday’s steep decline that left it with its worst day since 2000, and Salesforce rose 4.1% and AppLovin rose 3.3% after trimming their earlier year-to-date setbacks.
In the private-market and AI-software ecosystem, the day also included new product news from Anthropic. Anthropic unveiled tools for businesses to use with its Claude AI assistant, covering areas including human resources work, engineering, and investment banking; one of the tools lets users bring financial-market data from FactSet into Claude. FactSet’s stock jumped 5.9% for one of the biggest gains in the S&P 500, even though it remained down 30.6% for the year so far.
Not all of Tuesday’s AI optimism implied a complete replacement of existing software stacks, though. Wedbush analyst Dan Ives said the new uses “will not rip and replace existing software ecosystems and data environments” and that the tools would be “only as useful as the data it can reach.”
Outside the AI-fear trade, big U.S. companies continued reporting results for the end of 2025 that beat analysts’ expectations. Keysight Technologies rallied 23.1% for the biggest gain in the S&P 500 after reporting profit and revenue above expectations for the latest quarter, and the company also said revenue in the current quarter could rise by roughly 30% from a year earlier. Home Depot rose 2% after delivering stronger profit and revenue than analysts expected, even as Chief Executive Ted Decker pointed to “ongoing consumer uncertainty.”
Bond yields were steady, with Treasury yields holding relatively unchanged after a report said 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, according to the report cited in the market wrap.
In international markets, indexes were mixed in Europe with mostly modest moves, while Asia saw larger swings. South Korea’s Kospi rose 2.1%, Hong Kong’s Hang Seng fell 1.8%, and Shanghai rose 0.9% after reopening following a holiday of more than a week.