U.S. Stocks posted modest gains Wednesday as investors weighed concerns about the impact of artificial intelligence on various sectors. The Standard & Poor’s 500 rose 0.2% as of 9:36 a.m. Eastern Time, although the Nasdaq 100, heavily weighted with technology companies, edged up 0.1%, according to Bloomberg data.
The market’s performance comes amid a period of increased scrutiny regarding the potential disruption AI could bring to traditional business models. Despite the slight uptick in major indexes, volatility remained elevated as investors assessed the risks and opportunities presented by the rapidly evolving technology.
Meta Platforms agreed to deploy millions of Nvidia processors over the coming years, while Apple is accelerating development of three wearable devices powered by artificial intelligence. Investors are seeking out undervalued stocks following the largest weekly decline for the S&P 500 since November, with capital shifting from high-value technology stocks to more defensive sectors.
The index has struggled to break through the 7000-point level since its first attempt in October. Paul Stanley, Chief Investment Officer at Granite Bay Wealth Management, told Bloomberg, “While stocks have been relatively stable since the start of the year, we see the market awaiting the next catalyst. Identifying the winners and losers in the AI space will be the focus in 2026, and while AI promises much, not all companies should be assumed to succeed.”
Recent concerns on Wall Street have centered on whether AI will pose a threat to business models outside of the traditional technology sector, building on previous questions about the ability of major companies to generate returns from their substantial investments in AI. This rapid shift has led to sharp market fluctuations, despite relatively minor changes at the index level.
Andrew Tyler, Head of Global Market Intelligence at JPMorgan Chase & Co., described the price action as “the latest normal for 2026, small moves in the broad indexes with high volatility underneath.”
Apple’s correlation with the Nasdaq fell to its lowest level since 2006, driven by the company’s partial departure from the AI race, making it an outlier among its peers. Its shares have risen 1.7% in February, compared to a 3.3% decline for the Nasdaq and a 7.5% drop for the “Magnificent Seven” group of tech stocks.
Investors are anticipating several upcoming economic releases, including the GDP report expected Friday, which could show U.S. Economic growth of 2.7% in 2025, and delayed December inflation data. A Supreme Court ruling on tariffs and Nvidia’s earnings results next week are also on the horizon.
In other corporate news, shares of Madison Square Garden Sports rose after its board unanimously approved a study of potentially separating its New York Knicks and New York Rangers businesses into two independently traded companies. New York Times shares also climbed after Berkshire Hathaway purchased a stake in the company, while reducing its Amazon holdings by more than 75%. Palantir Technologies shares increased following a Mizuho Securities upgrade to outperform from neutral.
