US stocks close higher as traders return to AI stocks

Wall Street ended sharply higher on March 16, fuelled by gains in AI-related stocks, with Meta Platforms climbing after a report that it is preparing for sweeping layoffs, while oil prices retreated amid ongoing uncertainty about the Middle East conflict.

Meta jumped 2.3 per cent after Reuters reported that the social media platform plans to shrink its workforce by at least 20 per cent to offset costly artificial-intelligence infrastructure bets and prepare for greater efficiency brought about by AI-assisted workers.

Nvidia ended 1.6 per cent higher after CEO Jensen Huang announced new components at the chipmaker’s annual developer conference. Taiwan’s Foxconn, which makes AI servers using Nvidia chips, issued a strong quarterly revenue forecast on March 16.

Tesla rose 1.1 per cent after CEO Elon Musk said the company’s Terafab project to make AI chips will launch in seven days.

Micron Technology jumped 3.7 per cent after the memory chipmaker announced plans for a second manufacturing facility in Taiwan.

A modest drop in crude prices after the U.S. said it would be “fine” with some Iranian, Indian and Chinese ships moving through the Strait of Hormuz also offered some relief to the market.

“You’ve got news that Iranian oil tankers are moving through, or are soon going to be moving through, the Strait of Hormuz, which is a positive for global economic stability,” said Mr Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

“But on balance, the path forward is filled with twists and turns. ... There’s lack of visibility when the conflict is likely to end.”

Higher energy prices are likely to feature prominently in central bank meetings globally this week.

The Fed is widely expected to leave interest rates unchanged at the end of its two-day meeting on March 18. Traders have pushed back their expectations for an interest rate cut of at least 25 basis points beyond October, according to LSEG-compiled data, compared with their previous expectation of a cut in July.

“There are a couple of reasons to take any signals from this meeting with a pinch of salt. First, a swing in oil prices in either direction could quickly change the Fed’s thinking, and second, markets might slightly discount messages from Chair (Jerome) Powell, given this will be one of the last of his term,” said Mr James McCann, senior economist at Edward Jones in a note.

The S&P 500 climbed 1.01 per cent to end the session at 6,699.38 points, its strongest one-day gain in over a month.

The Nasdaq gained 1.22 per cent to 22,374.18 points, while the Dow Jones Industrial Average rose 0.83 per cent to 46,946.41 points.

All of the 11 S&P 500 sector indexes rose, led by information technology, up 1.39 per cent, followed by a 1.34 per cent gain in consumer discretionary.

Wall Street’s fear gauge, the CBOE volatility index, dropped 3.5 points to 23.7, while the rate-sensitive Russell 2000 index gained 0.94 per cent.

Despite logging declines over the past three weeks, US equities have fared better than global peers, buoyed by a rebound in beaten-down technology stocks and as the country is a net oil exporter. However, the S&P 500 remains down about 2 per cent so far in 2026.

February industrial production increased 0.2 per cent, slightly better than expectations of a 0.1 per cent rise. Travel stocks Delta Air Lines and Norwegian Cruise Line Holdings rose 3.5 per cent and 5.1 per cent, respectively, lifted by lower oil prices. Crypto stock Strategy Inc climbed 5.6 per cent as bitcoin rallied around 3 per cent.

Discount retailer Dollar Tree rose 6.4 per cent after signaling it could benefit from favourable tariffs in the near term. Advancing issues outnumbered falling ones within the S&P 500 by a 3.1-to-one ratio.

The S&P 500 posted 16 new highs and 10 new lows; the Nasdaq recorded 51 new highs and 138 new lows.

Volume on US exchanges was relatively light, with 17.4 billion shares traded, compared to an average of 19.9 billion shares over the previous 20 sessions. REUTERS