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Stock market today: Nasdaq, S&P 500 futures pop while Dow holds steady as Alibaba spreads AI cheer

US stocks rose before the bell on Wednesday, eyeing a return to their record-setting rally as Alibaba's (BABA) spending plans and Micron Technology's (MU) results lifted prospects for an AI boom.

Nasdaq 100 futures (NQ=F) moved up roughly 0.3%, while those on the S&P 500 (ES=F) nudged 0.1% higher. Contracts on the Dow Jones Industrial Average (YM=F), which includes fewer tech stocks, were broadly flat.

A turnaround in tone on techs is helping stocks shape up for a slight comeback, after the major gauges snapped a win streak on Tuesday amid losses for "Magnificent Seven" megacaps.

Alibaba stock jumped over 9% in premarket as investors welcomed the Chinese tech giant's pledge to hike its AI spending beyond its original $50 billion target. The boost is needed for Alibaba to keep pace as global investment in AI surges to $4 trillion, its CEO said. At the same time, Micron's stronger-than-expected quarterly earnings delivered another positive signal for the AI trade, helping lift shares slightly.

But debate over the prospects for US interest-rate cuts — the big focus for markets right now — appeared to keep a lid on gains. Jerome Powell stuck to his earlier script in a speech on Tuesday, saying the Federal Reserve would proceed cautiously on further rate cuts, even as he left the door open to more easing. The Fed chair also described stocks as "fairly highly valued."

Wall Street is now counting down to the release of the Fed's preferred inflation gauge, the Personal Consumption Expenditures index, on Friday. Traders are eager for reassurance that inflation isn't posing a threat to high expectations for two more rate cuts this year.

Before that, updates on weekly mortgage applications and August home sales on Wednesday will provide a window into the housing market and the US economy more broadly.

Here's a look at some of the top stocks trending in premarket trading:

Lithium Americas (LAC) stock soared 64% in premarket trading on Wednesday after the Trump administration said it is seeking an equity stake as much as 10% in the company.

General Motors (GM) stock rose 3% before the bell on Wednesday after Citi increased its price target for the stock to $75 from $61.

Micron (MU) stock rose 1% in premarket trading on Wednesday following the release of its fourth-quarter earnings report the day prior.

Micron (MU) did its part this week contributing to the AI bullishness.

Here's what execs said on the earnings call last night when asked about the demand outlook:

\\"In terms of the demand profile and what is shaping up looking ahead, certainly, the large hyperscalers are looking like they will be needing a significantly more storage capability for their AI server deployment because they have shortages on that side from the HDD segment of the market. And so the deployment of NAND SSDs and servers and data centers more broadly is going to increase in calendar 2026. So we expect, driven by that tailwind for the NAND industry conditions to start improving.\\"

Couple this with the $100 billion Nvidia (NVDA) and OpenAI (OPAI.PVT) deal this week, and Alibaba (BABA) saying today it would spend more than $50 billion over three years on AI models, and it's hard to play the bear hand on AI names right now!

It has been a hot minute since markets had to worry about a government shutdown.

We have been here before, and a shutdown is usually averted last minute. That's why the market tends to take the ordeal in stride until it absolutely can't.

Helpful context on the latest brewing debacle from Deutsche Bank strategist Jim Reid:

\\"Whilst Fed speakers provided the main headlines, an important developing story has been on the potential for a US government shutdown next week. For those who haven’t been following, government funding currently runs out on September 30, unless Congress vote to authorise more spending. And even though the Republicans have a majority in both chambers of Congress, they need 60 votes in the Senate to avoid a filibuster, when they only have 53 among themselves. Meanwhile, the Democrats are calling for an extension of healthcare subsidies, so there’s an impasse as it stands. There had been a meeting planned between President Trump and the House and Senate Democratic leaders, but Trump cancelled the meeting yesterday, posting that “I have decided that no meeting with their Congressional Leaders could possibly be productive.” So that cancellation has led to a fresh bout of concern that funding will run out at next week’s deadline, and we could see the first shutdown since the winter of 2018-19. Meanwhile, Trump’s main appearance yesterday was a combative speech at the UN, as he accused the organisation of offering only “empty words” and criticised other countries’ climate and immigration policies. Trump later seemed to give his clearest support to Ukraine yet suggesting that the country is in a position to win all its territory back. So that was a change in emphasis.\\"

A lot has been thrown at the market this month — a month that seasonally isn't often great from a historical perspective.

But here we are, getting bullish AI comments from Alibaba (BABA) and Nvidia (NVDA) this week and a rate cut last week!

Good point this morning from the host of the Yahoo Finance Trader Talk podcast Kenny Polcari:

\\"We have 5 more trading days until the end of the month and the end of the quarter. By all accounts, it has been good for both – So far, we are up 9% for the quarter and 3.7% for the month. I for one am surprised that we saw the strength this month that we saw, but there is always October!\\"

Two bullish calls this week on General Motors (GM) is enough to get my attention!

UBS out this morning upgrading GM to buy, citing its view of a better than expected margin outlook. I heard the same thing from an upbeat note on Monday from Citi’s Michael Ward. Tariffs still a risk to GM, but it appears to have managed the situation well from a margin standpoint.

Some of Ward’s thinking from his segment on Yahoo Finance on Monday is below. Keep an eye on Ford (F) here as well — I am headed to Detroit early next week for a CEO conference the company is holding. Could get commentary on near-term demand trends and the near-term margin outlook.

The world's biggest energy companies are planning for a potential natural gas boom, given the heavy power demand predicted to come from growth in AI infrastructure.

Yahoo Finance's Jake Conley reports:

The energy demand from data centers is expected to double by 2028, according to the Lawrence Berkeley National Laboratory. But the US power grid, full of aging infrastructure, years-long connection queues, and decades of stagnant industrial development, is largely unequipped to handle that demand today.

Much of the answer may lie in \\"off-grid\\" power, in which data centers get energy directly from their own sources instead of waiting years to be plugged into the grid.

And natural gas is positioned to meet a large share of this demand.

\\"We're focused on directly powering data center facilities so that they don't have to wait for these multiyear grid expansions that, unfortunately, is what it takes in the United States,\\" Chad Zamarin, CEO of pipeline operator Williams Companies, said at a conference in August.

Shares of Expand Energy (EXE), the country's largest natural gas producer, have risen more than 24% over the past year. Shares of fellow producers EQT Corporation (EQT) and Range Resources (RRC) are up more than 40% and more than 13%, respectively, while Williams Companies (WMB) is over 32% higher.

Read more here.

Alibaba (BABA, 9988.HK) shares surged after its CEO revealed the Chinese tech giant plans to ramp up AI spending past an original $50 billion-plus target.

The stock jumped around 9% in US premarket as Eddie Wu joined the ranks of tech leaders pledging ever-greater investment to compete in AI.

Bloomberg reports:

Wu anticipates overall investment in AI accelerating to some $4 trillion worldwide over the next five years — and Alibaba needs to keep up.

The company will soon add to a plan laid out in February to spend more than 380 billion yuan ($53 billion) developing AI models and infrastructure over three years, he said. His cloud division, which already operates services from the US to Australia, intends to launch its first data centers in Brazil, France and the Netherlands in the coming year.

Wu made his projections while outlining plans to roll out Qwen models and “full-stack” AI technology, reflecting Alibaba’s growing ambitions to both develop services and the infrastructure — such as chips — that underpin the technology. Its shares rose as much as 7.8% in Hong Kong, helping lift Chinese chipmakers ACM Research (Shanghai) Inc. (688082.SS) as much as 15% and NAURA (002371.SZ) Technology Group Co. by 10% (002371.SZ).

The bullish reaction underscores global exuberance for all things AI, with investors betting massive capital spending will ultimately prove profitable. While skeptics have warned of a bubble in the making, for now markets are viewing such outlays as a sign of growing corporate confidence in the technology.

“The industry’s development speed far exceeded what we expected, and the industry’s demand for AI infrastructure also far exceeded our anticipation,” Wu told a developer conference in Hangzhou on Wednesday. “We are actively proceeding with the 380 billion investment in AI infrastructure, and plan to add more.”