U.S. stocks climbed Wednesday as a sharp rally in SpaceX reignited enthusiasm for AI and helped lift tech shares ahead of another round of major corporate earnings. The Dow Jones Industrial Average gained roughly 0.3%, or nearly 150 points, while the S&P 500 advanced 0.5% and the tech-heavy Nasdaq Composite rose approximately 0.7%.
The gains followed a volatile stretch for Wall Street, with investors returning to technology stocks after concerns about AI infrastructure spending and elevated borrowing costs weighed on the sector. SpaceX's latest earnings provided a fresh catalyst, while anticipation surrounding Tesla and Meta's quarterly results helped support sentiment despite disappointing guidance from Netflix and persistently high oil prices.
Market Movers:
- SpaceX (SPCX) +10.8%: Shares surged after the company reported quarterly results that renewed investor enthusiasm for its AI-related ambitions. CEO Elon Musk also revealed that SpaceX and Tesla had formed special committees to explore a potential merger, adding another major catalyst for the stock.
- Tesla (TSLA) +3.2%: Shares climbed ahead of the electric vehicle maker's quarterly earnings report scheduled for after Wednesday's closing bell. Investors are also weighing the possibility of a merger with SpaceX following Musk's announcement that both companies are exploring a potential combination.
- Netflix (NFLX) -4%: Shares fell after the streaming giant forecast fourth-quarter revenue of $13.44 billion, below Wall Street's $13.51 billion estimate. Netflix also lowered its 2026 advertising revenue outlook from $3 billion to $2.7 billion, citing a slower rollout of certain advertising products.
- Berkshire Hathaway (BRK.B) +0.5%: Shares advanced to fresh intraday highs after the conglomerate's Class B stock closed at a record Tuesday. The rally reflects renewed investor interest in diversified businesses as some investors rotate away from expensive AI stocks.
- Meta Platforms (META) -1.8%: Shares faced pressure ahead of the company's quarterly earnings report Wednesday evening. Investors are looking for updates on advertising growth, AI infrastructure spending and whether Meta can sustain profitability while expanding its computing capacity.
SpaceX Rally Revives the AI Trade
SpaceX became Wednesday's standout technology story after its quarterly results helped restore confidence in the AI infrastructure sector. The rally came at an important moment for investors, who have spent much of October questioning the enormous spending commitments required to build AI data centers and computing systems. Concerns about financing costs and the profitability of those investments have contributed to recent volatility across technology stocks.
Adding to the excitement, Musk disclosed that SpaceX and Tesla had established special committees to consider a potential merger. Although no agreement has been announced, the possibility of combining the companies has introduced another significant development for investors to assess.
Big Tech Earnings and Anthropic IPO Plans Draw Attention
The next major test for technology stocks arrives after Wednesday's closing bell, when Tesla and Meta are scheduled to report quarterly earnings. Investors will be watching Tesla's profitability and business outlook, while Meta's results could provide important clues about digital advertising demand and the returns on its substantial AI investments.
Meanwhile, AI developer Anthropic could publicly file its IPO prospectus as soon as Friday, according to reports citing people familiar with the company's plans. The anticipated offering could surpass SpaceX's June debut and become the largest IPO in history, offering another major test of investor appetite for AI-related businesses. Netflix's disappointing outlook provided a reminder that strong expectations can leave technology stocks vulnerable when companies fall short of Wall Street forecasts.
Berkshire Hits Records as Oil Prices Stay Elevated
Outside the technology sector, Berkshire Hathaway continued its impressive run, reaching fresh highs as investors showed renewed interest in established, diversified businesses. The conglomerate has gained approximately 7% since the S&P 500's October 6 record, benefiting from a rotation away from some of the market's biggest AI winners. Energy prices remained another concern. Brent crude traded near $108 per barrel, while West Texas Intermediate hovered around $97, keeping inflation risks in focus as investors assess the Federal Reserve's interest rate outlook.
Looking Ahead
Wall Street's attention now turns to earnings from Tesla and Meta, with investors looking for evidence that major technology companies can sustain growth while managing the rising costs of AI expansion. Any updates on a potential SpaceX-Tesla merger could also generate significant volatility. Anthropic's anticipated IPO filing and continued strength in oil prices will provide additional catalysts in the days ahead. With technology stocks attempting to regain momentum, the next round of earnings could determine whether Wednesday's rally develops into a more sustained recovery.