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All three major U.S. stock indexes ended higher Wednesday, led by a 1.1% gain in the Nasdaq, as investor optimism about AI met reports of returns from major AI-related businesses. SpaceX’s reported results and discussion of a possible merger with Tesla drew attention, while upcoming company earnings and questions about AI spending remain key tests for the rally.
All three major U.S. stock indexes rose Wednesday as investors responded to optimism about artificial intelligence and reports of returns from AI-related businesses. The Nasdaq Composite gained 1.1% to 26,702, the S&P 500 added 0.6% to 7,757, and the Dow Jones Industrial Average rose 0.7% to 52,856, according to Kiplinger’s market report. Whether AI spending can continue to produce returns is a central question for the market as more companies prepare to report results.
The gains came amid a busy earnings period. Kiplinger reported that SpaceX announced results after Tuesday’s closing bell, including a bottom-line beat that the report attributed to rapid growth in its Super Intelligence and Starlink segments. The source did not provide the specific earnings figures. SpaceX is privately held, so its reported results do not represent a public-company earnings release in the same way as those from listed firms.
SpaceX chief executive Elon Musk said the boards of SpaceX and Tesla had formed special committees to discuss a possible merger. Tesla shares rose 3.4% Wednesday, according to Kiplinger. The report described a deal as a possibility under discussion, not an agreed transaction; it provided no terms, timetable or confirmation that a merger will occur.
Other earnings news produced mixed stock moves. AT&T reported third-quarter revenue of $32.3 billion, up 5.3% year over year, and earnings per share of 65 cents, both above the estimates cited by Kiplinger. The company raised its 2026 earnings forecast to $2.40 per share from a range of $2.25 to $2.35 and said it planned about $10 billion in share repurchases this year. Its shares nevertheless fell 6.5%, as reported new postpaid subscribers of 379,000 came in just below the cited consensus estimate of 379,300.
AI Returns Face an Earnings Test
Wednesday’s advance reflects a market weighing the promise of AI against the cost of building the technology. Reports of growth and earnings from AI-related businesses can support investor confidence that heavy investment may generate revenue. But one company’s results do not establish that the broader industry’s spending will pay off, and the source gives no detailed figures to measure SpaceX’s reported performance.
The next round of results and management guidance may shape whether optimism broadens or gives way to renewed concern about costs. Kiplinger cited Morgan Stanley Wealth Management portfolio manager Daniel Skelly, who described recent volatility as potentially healthy against a backdrop of solid growth and strong earnings, while acknowledging that investor concern about spending was merited. That distinction matters: confidence in long-term demand can coexist with uncertainty about how much capital companies will need and when they will see returns.
AT&T’s decline also shows that a generally positive market does not lift every stock. Its results beat the estimates cited in the report, but subscriber additions fell short of the forecast by 300 and were down from the second quarter. Investors may be weighing the durability of recurring subscriber revenue and competition, rather than focusing only on headline revenue and earnings.
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Earnings, AI Spending and Telecom
The market report placed Wednesday’s gains within a wider debate over the AI investment cycle. Companies are spending on computing capacity and related products, while investors look for evidence that those investments are creating revenue or improving business performance. Skelly said the long-term AI capital-spending cycle remained intact and could favor large companies with strong balance sheets, but also pointed to the boom-and-bust history of some earlier U.S. innovation cycles.
Telecom competition added another strand to the day’s news. Kiplinger reported that SpaceX had accelerated plans for a consumer wireless business through an $8 billion spectrum purchase, potentially putting it in competition with established operators. AT&T, Verizon and T-Mobile shares had all declined since October 8, according to the source, though the report does not establish that SpaceX’s plans alone caused those moves. Treasury trading was comparatively muted: the two-year yield rose 2.3 basis points to 4.81%, while the 10-year yield edged up 0.6 basis point to 5.123% and the 30-year yield fell 1.2 basis points to 5.413%.
“The long-term AI capex cycle remains intact and should continue to favor large players with strong balance sheets.”
— Daniel Skelly, as quoted by Kiplinger
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Merger Terms and AI Returns
No merger agreement was reported between SpaceX and Tesla. The source says the companies’ boards formed special committees to discuss a possible combination, but it does not identify terms, a proposed structure, a decision date or whether either board supports a deal. The outcome and any regulatory or shareholder steps are also unknown.
The available account does not include detailed SpaceX financial figures, making it difficult to assess the scale or durability of the reported earnings beat. Nor does one set of company results settle the broader question of whether AI-related capital spending will produce returns across the industry. The earnings and guidance due from other major companies could add evidence, but their results were not yet included in the report.
For AT&T, the report does not establish whether the subscriber shortfall signals a lasting change in customer demand or a temporary fluctuation. It also does not quantify how much competition from existing carriers or potential new services may affect future subscriber growth.
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More Results Set the Direction
Investors were watching for earnings and operating updates from major companies after Wednesday’s close. Kiplinger specifically said Tesla and Meta Platforms were due to report third-quarter results; those results were pending at the time of the report. The figures and management commentary could influence views on AI investment, business growth and the ability to turn new technology into revenue.
Markets will also look for further information on the SpaceX-Tesla discussions. Until the companies disclose a decision or more detail, the merger remains a possibility under discussion rather than a completed transaction. In the near term, the clearest test for the AI-led optimism is whether upcoming results and guidance support expectations for returns while addressing concerns about the cost of investment.
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Key Questions
Why did U.S. stocks rise Wednesday?
Kiplinger attributed the gains to broad optimism about AI and reported returns from AI-related businesses. The Nasdaq rose 1.1%, the S&P 500 gained 0.6%, and the Dow added 0.7% at the close.
Did SpaceX and Tesla agree to merge?
No agreement was reported. Elon Musk said the companies’ boards had formed special committees to discuss a possible merger, but no terms or decision were disclosed.
AT&T reported revenue and earnings per share above the estimates cited by Kiplinger, but its 379,000 postpaid subscriber additions were slightly below the 379,300 consensus estimate and below the prior quarter’s 432,000. The report does not establish a single cause for the share decline.
What remains uncertain about the AI rally?
It remains unclear whether returns from AI-related businesses will broadly justify the industry’s spending and how durable those returns will be. Upcoming earnings and company guidance may provide more evidence, but the reported SpaceX results alone do not resolve the question.
Source: rss
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