Chipmakers that benefited from AI-related demand for their components also rose. SanDisk rose 15.4%, while Advanced Micro Devices rose 4% and Micron Technology rose 5.5%.It was the first gain for the S&P 500 in three sessions, following recent concerns about expensive valuations of tech companies whose shares have soared in recent years on optimism about AI. The S&P 500 is up about 2% in 2026, lagging the Russell 2000’s more than 6% rally.
Investors often view gains in small-cap stocks as a reflection of confidence in the economy.
“Fundamentals are good and earnings are strong. We have positive surprises on both revenue and earnings, pretty much across the board,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
Analysts expect S&P 500 companies to have grown earnings by nearly 11% in the December quarter, up from an estimate of about 9% in early January, according to LSEG. Technology-related companies are responsible for most of that growth. Walt Disney slumped 7.4% despite quarterly profits exceeding Wall Street expectations after it warned of a drop in international visitors to its US theme parks and a slump in profits from its TV and film division.
The S&P 500 climbed 0.54% to end the session at 6,976.44, just below Tuesday’s record high of 6,978.60.
The Nasdaq gained 0.56% to 23,592.11 points, while the Dow Jones Industrial Average rose 1.05% to 49,407.66 points.
Volume on US exchanges was high, with 20.1 billion shares traded, compared to an average of 19.4 billion shares over the previous 20 sessions.
U.S. factory activity grew in January for the first time in a year, PMI data showed. The CBOE VIX, a volatility index also known as Wall Street’s “fear gauge,” fell 1 point to 16.5. During the session it reached a high of almost two weeks. The S&P 500 energy sector index fell 2% as oil prices fell. US President Donald Trump said Iran was in “serious discussions” with Washington, comments that signaled de-escalation and eased fears of supply disruptions. Lower energy prices boosted airline stocks. United Airlines, JetBlue, Delta Air Lines and Southwest all rose between 4% and 8%. The House of Representatives has passed legislation to lift the partial government shutdown that began on Saturday, with a final vote expected on Tuesday. The Bureau of Labor Statistics said its closely watched January employment report would not be released Friday because of the partial shutdown.
Within the S&P 500, rising issues outpaced declining issues by a 1.4-to-one ratio.
The S&P 500 recorded 30 new highs and 9 new lows; the Nasdaq recorded 160 new highs and 217 new lows.
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