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

By Stephen Culp and Shashwat Chauhan

NEW YORK, Feb 24 (Reuters) - Wall Street closed higher 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 in recent weeks, with Monday's steep decline the latest example of on-again, off-again risk appetite amid these uncertainties.

"We're in for a period of time where the market will be going through some uncertainty and today we're seeing a little bit of a buy on the dip," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. "We're going to see day-to-day movements but overall, there's so much unknown in terms of how AI ends up being additive or disruptive to some of these companies."

All three major U.S. stock indexes posted solid gains on the session, with semiconductors .SOX outperforming.

The battered S&P Software & Services index .SPLRCIS posted gains.

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.

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," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "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 uncertainty.

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

According to preliminary data, the S&P 500 .SPX gained 52.70 points, or 0.77%, to end at 6,890.45 points, while the Nasdaq Composite .IXIC gained 239.91 points, or 1.06%, to 22,867.18. The Dow Jones Industrial Average .DJI rose 377.40 points, or 0.77%, to 49,181.46.

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, enjoyed robust rebounds.

Home Depot HD.N, another Dow component, gained 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 jumped on the news.

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