US STOCKS-Wall St bounces back on renewed tech vigor, easing AI concerns

By Stephen Culp and Shashwat Chauhan

NEW YORK, Feb 24 (Reuters) - Wall Street rebounded on Tuesday, with tech stocks leading the charge as renewed enthusiasm for artificial intelligence offset concerns over potential disruptions caused by the nascent technology.

Speculation regarding AI's possible impact on a wide variety of sectors has prompted oversized moves in stocks and indexes across myriad sectors in recent weeks, with Monday's steep decline the latest example of on-again, off-again risk appetite amid these uncertainties.

"The reaction in these stock prices is in anticipation of something changing down the line and (investors) don't want to be stuck," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "We're not there yet, but nobody wants to be the last one holding the bag on some of these names as they get repriced."

But all three major U.S. stock indexes moved decisively higher in the session, with semiconductors .SOX outperforming.

The battered S&P Software & Services index .SPLRCIS advanced 1.4%.

Artificial intelligence lab Anthropic announced several new plug-ins targeting areas such as investment banking and human resources, weeks after its earlier releases stoked a selloff of traditional software stocks.

The company said its new plug-ins were developed jointly with partners, among them Thomson Reuters TRI.TO, which owns Reuters news agency, Salesforce CRM.N and FactSet FDS.N.

FactSet stock rose 7.1%, while U.S.-listed shares of Thomson Reuters jumped 11.7%.

Salesforce advanced 4.7%, among the Dow Jones Industrial Average's biggest percentage gainers.

Other sectors ranging from commercial real estate to trucking and logistics have recently logged steep declines, as AI developments gave rise to concerns of industry-specific disruptions.

"Anthropic's been busy with announcements that their product is going to do all these new and sort of wonderful things," Pavlik added. "It's still early on in the process and certainly acceptance and the application of these tools is probably still a ways away."

Monetary policymakers weighed in on AI's potential impact on the labor market. Federal Reserve Governor Lisa Cook said the technology could lead to a possible rise in the unemployment rate, while Fed Governor Christopher Waller said he does not expect AI to disrupt the labor market.

The U.S. Supreme Court's decision on Friday to strike down many of President Donald Trump's tariffs, and Trump's subsequent threat to implement a fresh round of levies against goods imported from abroad, remained a source of lingering uncertainties.

"There are still questions about the deals that were in place already," Pavlik said. "What happens to those? Are they still happening?"

The Dow Jones Industrial Average .DJI rose 433.31 points, or 0.89%, to 49,237.37, the S&P 500 .SPX gained 52.34 points, or 0.77%, to 6,890.09 and the Nasdaq Composite .IXIC gained 239.14 points, or 1.06%, to 22,866.42.

Among the major sectors of the S&P 500, consumer discretionary .SPLRCD and technology .SPLRCT led the gainers, while energy shares .SPNY suffered the steepest percentage losses.

Airlines .SPCOMAIR and travel/leisure-related stocks .SPCOMHOTL, which were battered on Monday in the wake of a winter storm that paralyzed much of the Northeast, both enjoyed robust rebounds, advancing 3.8% and 3.0%, respectively.

Home Depot HD.N, another Dow component, advanced 1.9% after the home-improvement retailer beat fourth-quarter estimates and maintained its annual forecasts.

Advanced Micro Devices AMD.O announced it would sell up to $60 billion in AI chips to Meta Platforms META.O over the next five years in a deal that would allow the Facebook parent to buy as much as 10% of the chipmaker. AMD shares rose 8.9%, while Meta inched 0.2% higher.

Keysight Technologies KEYS.N leaped 21.3% after the electronic equipment maker forecast second-quarter profit ahead of Wall Street estimates.

Advancing issues outnumbered decliners by a 1.96-to-1 ratio on the NYSE. There were 356 new highs and 133 new lows on the NYSE.

On the Nasdaq, 3,206 stocks rose and 1,428 fell as advancing issues outnumbered decliners by a 2.25-to-1 ratio.

The S&P 500 posted 41 new 52-week highs and 12 new lows while the Nasdaq Composite recorded 88 new highs and 155 new lows.