Stocks rebounded on Tuesday, recovering from an AI-driven selloff, with major indexes closing higher and gains led by technology and consumer discretionary sectors, while attention turned to upcoming earnings from key companies. Notable movers included AMD, which surged on news of a Meta partnership, and Keysight Technologies, which jumped after strong earnings, while Workday and Texas Instruments declined due to disappointing guidance and higher capital expenditures, respectively.
Stocks rebounded on Tuesday after a recent AI-driven selloff, with the S&P 500, Dow Jones Industrial Average, Nasdaq Composite, and Russell 2000 all closing higher. The S&P 500 gained about 0.8%, clawing back most of the previous day’s losses, while the Nasdaq rose 1% and the Russell 2000 outperformed with a 1.2% increase. Most sectors finished in the green, led by consumer discretionary, industrials, and technology, while energy and healthcare lagged. The market’s attention was focused on upcoming earnings reports from major companies like Workday, GoDaddy, and HP Inc., which could influence future market direction.
A major story of the day was the strong performance of AMD, which surged nearly 9% after news that Meta (Facebook’s parent company) would not only buy AMD chips but also invest in AMD shares. This move, part of a multi-billion dollar data center deal, signaled continued confidence in AI-related hardware. Keysight Technologies was the top gainer in the S&P 500, jumping 23% after beating earnings estimates and forecasting strong growth, driven by AI workloads and expansion in wireless and defense sectors. Thomson Reuters also rallied, up 11.5% on the Nasdaq 100, after announcing it had reached one million professional users for its AI-powered legal tool and was collaborating with Anthropic.
On the downside, Workday’s stock continued to struggle, falling another 8% in after-hours trading despite reporting better-than-expected earnings per share and revenue growth. The company’s guidance for subscription revenue and operating margin for the coming year fell short of Wall Street expectations, fueling concerns about its ability to compete in an AI-driven environment. Workday’s management emphasized their commitment to integrating AI into their HR and finance platforms, but investors remained skeptical, with the stock down about 40% year-to-date.
Other notable decliners included Texas Instruments, which dropped nearly 3% after announcing higher-than-expected capital expenditures to bring manufacturing back in-house. Whirlpool shares fell 14% following a public offering of new shares, while Novo Nordisk and Eli Lilly both declined after Novo announced plans to cut U.S. prices for its blockbuster drugs Wegovy and Ozempic by up to 50%. In the cryptocurrency space, Bitcoin was on track for its worst month since June 2022, hovering around $64,471.
Additional earnings reports after the bell included Lucid, which posted a wider-than-expected quarterly loss but beat revenue estimates, though its shares fell 6-7% in after-hours trading. Tanger, a retail outlet operator, reported better-than-expected revenue but saw little movement in its stock price. GoDaddy’s results were mixed, with revenue slightly below estimates but earnings per share coming in above expectations. Overall, the market showed resilience after the AI-fueled selloff, but investors remained cautious ahead of key earnings and ongoing developments in the AI and tech sectors.