U.S. equities ended Tuesday's regular session at record levels, with enthusiasm for artificial intelligence continuing to power gains into after-hours trading. The S&P 500 climbed 0.81% to 7,259.22, while the Nasdaq Composite advanced 1.03% to 25,326.13. The Dow Jones Industrial Average also posted a solid gain, rising 0.73% to 49,298.25. All 11 S&P 500 sectors finished in positive territory, led by materials and information technology.
The rally's momentum extended after the closing bell, driven by standout moves in semiconductor and AI infrastructure names. Advanced Micro Devices (AMD) surged 12% in late trading after the company issued a second-quarter revenue forecast of approximately $11.2 billion, surpassing the $10.52 billion consensus estimate. The upbeat guidance reflects robust demand for data-center chips used in AI applications, including both graphics processing units (GPUs) and central processing units (CPUs).
Intel (INTC) shares jumped 13% following a Bloomberg report that Apple may utilize Intel's chipmaking services, signaling a potential shift in the tech giant's supply chain strategy. The broader semiconductor space also rallied, with the PHLX semiconductor index hitting an all-time high, up 4.2% on the day and now 55% higher year-to-date. Super Micro Computer (SMCI) added 17% after projecting fourth-quarter revenue between $11 billion and $12.5 billion, exceeding the $11.07 billion consensus.
AMD's first-quarter results showed revenue of $10.3 billion, a 38% year-over-year increase, with adjusted earnings per share of $1.37. CEO Lisa Su attributed the performance to accelerating demand for AI infrastructure, noting that data centers have become the company's primary growth engine for both revenue and earnings. The competitive landscape remains intense, with AMD vying for a larger share of the AI chip market against Nvidia (NVDA), while Intel seeks to regain ground in server CPUs and manufacturing.
Investor focus is squarely on whether the surging AI demand translates into high-margin sales, a key metric for valuations amid elevated expectations. S&P 500 companies are on track for 28% first-quarter earnings growth year-over-year, the largest profit jump since 2021, according to LSEG data. However, AMD's management warned that rising costs for memory and components could weigh on PC shipments in the second half, while gaming revenue is expected to decline more than 20% sequentially.
Oil prices provided some relief for markets, with Brent crude falling 4% to $109.87 a barrel after briefly surpassing $115 on Monday. U.S. officials indicated that the Iran ceasefire remains intact, despite renewed tensions near the Strait of Hormuz. Meanwhile, the 10-year Treasury yield eased to 4.42%, still elevated compared to pre-conflict levels but offering a modest tailwind for equities.
Super Micro Computer's CEO Charles Liang highlighted the company's transformation into a total data center infrastructure provider, with new manufacturing capacity in Silicon Valley positioning it to capture AI and enterprise demand. Third-quarter net sales reached $10.2 billion, more than double the $4.6 billion reported a year earlier, though down from $12.7 billion in the previous quarter. The company is also navigating an independent probe into export-control matters, which could impact future forecasts and prior results.
Looking ahead, Wednesday's session will test whether the AI-driven rally can sustain its momentum. With indexes at record highs and semiconductor stocks running hot, investors will scrutinize upcoming earnings reports for signs that guidance can support current valuations. The after-hours activity suggests enthusiasm for the theme remains strong, but the bar for continued outperformance is rising.
