S&P 500 Touches 7,000 as AI Momentum Builds
U.S. stocks pushed higher Wednesday, briefly lifting the S&P 500 above the 7,000 level following a record close.
The milestone move reflected renewed enthusiasm around artificial intelligence spending, just hours before the Federal Reserve’s latest policy decision and earnings reports from several megacap technology companies.
At mid-session:
- S&P 500 hovered near flat after the brief breakout
- Nasdaq Composite edged up 0.1%
- Dow Jones Industrial Average gained 0.1%
AI Infrastructure Back in the Driver’s Seat
Optimism accelerated after a surprise surge in orders for chipmaking equipment from ASML, reinforcing expectations of a prolonged AI investment cycle.
While ASML shares later pulled back, the news lifted sentiment across the semiconductor supply chain:
- Nvidia gained as demand expectations firmed
- TSMC also benefited from the AI tailwind
Attention now turns to earnings from Microsoft and Meta Platforms, both of which have committed heavily to AI-driven data center expansion. Results from Tesla are also due, with Apple reporting Thursday.
Fed Decision Looms as Dollar Weakness Adds Complexity
Investors are also bracing for the Federal Reserve’s first rate decision of the year. The central bank is widely expected to hold rates steady in the 3.5%–3.75% range, shifting attention to Chair Jerome Powell’s press conference for guidance on future cuts.
Markets are currently pricing in two quarter-point cuts by the end of 2026, according to futures data.
Recent weakness in the U.S. dollar has added another layer of uncertainty. The currency stabilized Wednesday after falling to its lowest level since 2022 earlier in the week, raising questions about how prolonged dollar softness could influence policy expectations.
AI Data Center Demand Lifts Storage Stocks
Outside megacap tech, Seagate Technology surged nearly 17% after issuing revenue and earnings guidance above expectations.
Management pointed to rising demand for high-capacity storage driven by agentic AI and data-intensive workloads. The stock is now:
- Up more than 50% over the past month
- Up nearly 340% over the past year
Crypto Climbs Ahead of Fed Decision
Cryptocurrencies also moved higher ahead of the Fed announcement:
- Bitcoin rose nearly 2%
- Ethereum gained close to 3%
- Solana, XRP, and BNB posted moderate advances
Investors continue to bet that the Fed will hold rates steady, with easing potentially resuming around mid-year. Separately, progress on the Clarity Act in the Senate added optimism around longer-term regulatory clarity for digital assets.
Crypto-linked stocks traded mixed, with modest moves across major platforms and issuers.
WSA Take
Breaking 7,000 isn’t just a psychological win — it underscores how AI infrastructure spending is now the market’s primary growth engine.
With Big Tech earnings and the Fed decision converging, near-term volatility is likely. But as long as capital continues flowing into chips, data centers, storage, and power-hungry compute, AI remains the dominant narrative pushing equities higher.
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