U.S. stock markets opened with mixed trends on Wednesday (October 28). Manufacturers of artificial intelligence chips rebounded, driving up the Nasdaq Index and the S&P 500 Index; however, the Dow Jones Industrial Average declined before the release of the Federal Reserve's interest rate decision.
According to Reuters, the Nasdaq Composite Index opened up 0.24% at 26,541.61 points; the S&P 500 Index rose 0.17% to 7,735.56 points. The Dow Jones Industrial Average fell 0.08%, or about 42 points, to 52,335.43 points.
Previously, the Nasdaq, which is dominated by technology stocks, had risen for two consecutive trading days. Despite ongoing concerns in the market regarding AI infrastructure spending and borrowing costs, investors have returned to the semiconductor sector once again.
SK Hynix profits soar by 632%, Micron and NVIDIA also see gains
After South Korea's SK Hynix announced its quarterly results, the memory chip company became a major driving force behind the high spirits in the early-morning market.
The company's operating profit soared by 632% year-on-year to approximately 83.3 trillion Korean won; revenue increased by 328% to 104.6 trillion Korean won. The company also announced a shareholder return plan worth about 75 billion US dollars.
The report indicates that these results further reinforce the market's expectation that demand for high-bandwidth memory remains strong.
According to Reuters, Micron Technology rose by about 4% before the market opened, Western Data rose by 4.5%, and NVIDIA rose by 0.8%. AMD rose by 1.5%, and Mellanox Technologies rose by 1.7%.
However, Seagate Technology's trend was contrary to the overall market; its stock price fell by 3.7% before the opening of trading after the release of its quarterly earnings.
This differentiation reflects a broader issue surrounding the AI industry: semiconductor suppliers can achieve substantial profits, while companies financing the underlying infrastructure face increasing pressure.
Recently, such concerns have further intensified. The yield on CoreWeave bonds has approached 15%, raising doubts in the market about relying on debt to drive the expansion of data centers.
Microsoft and Google face a $600 billion AI expenditure challenge
Wall Street is also preparing for the financial reports of large technology companies after the close on Wednesday.
Microsoft and Alphabet will announce their quarterly earnings. Investors will closely monitor the growth of cloud computing, AI infrastructure spending, and whether the substantial investment commitments are generating sufficient returns.
Together with Amazon, these two companies' total expenditures on AI infrastructure in 2026 could approach 600 billion US dollars.
Relevant analysis indicates that with the accelerating growth in demand for computing power, the continuously rising capital expenditures may put pressure on cash flows.
The financial reports to be released soon may determine whether the rebound in the semiconductor sector on Wednesday will evolve into a broader trend for tech stocks.
The Fed's interest rate decision could reverse the early morning gains on Wall Street
The market generally expects that policymakers will maintain the benchmark interest rate range unchanged at 3.75% to 4.00%.
A previous survey by Reuters showed that 94 out of 100 economists expected a pause in interest rate hikes in October, while all respondents predicted another hike in December.
However, inflation remains high, and the recent rise in U.S. Treasury yields has also made the outlook for the stock market more complex.
The high borrowing costs, combined with the massive investment in AI infrastructure, have already affected market sentiment. Reports indicate that this was evident during the stock market rebound on Monday.
Maya Bennett
Maya Bennett is a financial journalist who has reported on cryptocurrencies, stocks, and broader market trends. Her coverage focuses on Bitcoin, major digital assets, the stock market, monetary policy, as well as economic developments that influence investor sentiment. She is adept at transforming rapidly changing market stories into clear and concise reports.
