'Semiconductor queen' Lisa Su says AI demand will last for years; AMD hits all-time high as Wall Street sets new records

All three major US stock indexes rose Tuesday as falling Treasury yields and growing optimism ahead of third-quarter earnings season pushed the S&P 500 and Nasdaq Composite to fresh all-time highs.

The Dow Jones Industrial Average closed up 253.38 points, or 0.49 percent, at 51,521.28. The S&P 500 gained 44.98 points, or 0.58 percent, to finish at 7,818.93, while the Nasdaq Composite added 122.48 points, or 0.45 percent, to close at 27,599.79.

Anticipation is building ahead of third-quarter earnings reports set to begin in earnest next week. Goldman Sachs forecast that earnings per share for S&P 500 companies would rise 27 percent year-on-year in the third quarter, with companies benefiting from expanded AI infrastructure investment expected to account for more than half of total earnings growth.

Treasury yields, which had weighed on markets recently, also pulled back. The yield on the 10-year US Treasury note fell 3 basis points to 5.281 percent. The retreat from the highest level since 2002 — reached on Tuesday — helped ease some concerns about further Federal Reserve tightening.

Rate futures markets also reflected a reduced likelihood of another Fed rate hike. According to CME Group's FedWatch tool, the probability of the Fed raising its benchmark interest rate at the October FOMC meeting stood at 19.4 percent as of that afternoon, down sharply from 50.9 percent a week earlier.

Oil prices also eased, reducing another source of pressure on equities. Increased crude exports from the Middle East and a G7 agreement to release strategic reserves helped calm supply worries. December Brent crude settled up 0.26 percent at $100.58 a barrel, while November West Texas Intermediate rose 0.01 percent to $89.44.

Among individual stocks, semiconductor companies tied to AI and data centers outperformed. Marvell Technology jumped 5.8 percent after raising its sales outlook to reflect strong demand for data center chips, while Broadcom gained 3.7 percent. AMD closed up 2.8 percent at $649.42, setting a new all-time high.

AMD's advance was driven in part by expectations that demand for AI semiconductors will outpace supply for years to come. Speaking in Taipei, AMD CEO Lisa Su said demand would remain "very high for the next several years," adding that while the company plans to significantly expand supply by 2027, "we clearly need more." She said shortages extend beyond central processing units to memory chips — including HBM used in AI servers — and advanced packaging capacity.

To expand production capacity, AMD is coordinating its supply chain with partners on a three-to-five-year horizon, longer than the previous one-to-two-year window. Citigroup raised its price target on AMD from $575 to $800, arguing that the spread of agentic AI could drive significantly greater computing demand than conventional chatbots.

Expectations for surging power demand from AI data centers also lifted related stocks. Constellation Energy, which signed a large-scale power supply agreement with Google, surged 12.3 percent.

Steven Colano, chief investment officer at Integrated Financial Partners, said investors are currently taking a flexible view of inflation concerns, with market attention shifting toward corporate earnings growth and AI investment.