US stocks rose on Wednesday, eyeing a return to their record-setting run as Alibaba's (BABA) spending plans lifted hopes for a continuation of the AI-fueled tech rally.

The tech-heavy Nasdaq Composite (^IXIC) and the Dow Jones Industrial Average (^DJI) moved up nearly 0.3%, while the S&P 500 (^GSPC) nudged around 0.2% higher.

Tech stocks are shaping 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 8% in early trading 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, though shares in the memory chipmaker — which supplies semiconductors for Nvidia's (NVDA) AI systems — fell Wednesday.

Debate over the prospects for US interest-rate cuts — the big focus for markets right now — appeared to keep a lid on gains. Comments from Federal Reserve officials this week have hinted at growing disagreement on what the path of policy should be, given the cracks showing in the labor market.

Fed Chair Jerome Powell reiterated in a speech on Tuesday that the central bank would proceed cautiously on further rate cuts, even as he left the door open to more easing. He 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. Markets are watching 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.

US stocks rose at the open on Wednesday as Alibaba's (BABA) plans to hike its artificial intelligence spending lifted hopes for a continuation of the AI-fueled tech rally.

The tech-heavy Nasdaq Composite (^IXIC) and the Dow Jones Industrial Average (^DJI) moved up nearly 0.3%, while the S&P 500 (^GSPC) nudged around 0.2% higher.

Chinese tech and chipmaker stocks got a lift on Wednesday following an 8% rise in Alibaba (BABA) stock after the company announced its growing AI spending ambitions.

Shares of SMIC (0981.HK), China's largest semiconductor foundry, rose 5% while Hua Hong (1347.HK) added nearly 4% in Hong Kong. In Shanghai, shares of Cambricon (688256.SS), a challenged to Nvidia (NVDA), gained 1.7%.

The moves came after Alibaba revealed plans to spend more than $50 billion on artificial intelligence in order to keep up with the pace of investment from other large tech leaders.

Also helping the stock were increased bets from Cathie Wood's Ark Invest. The firm reopened two positions in Alibaba stock and also invested in other Chinese stocks, including Baidu (BIDU) and Pony AI (PONY).

Baidu stock climbed 3%, while Pony AI stock advanced 2%.

Lithium Americas (LAC) stock jumped about 70% higher ahead of the opening bell on Wednesday after Reuters reported that the Trump administration is seeking an equity stake of as much as 10% in the company.

The Trump administration is intervening in the company as a way of renegotiating a $2.26 billion Department of Energy loan granted under the Biden administration for the Thacker Pass lithium project. Trump has also pushed for the US to take stakes in Intel (INTC), MP Materials (MP), and other companies seen as critical to national security.

The Thacker Pass mining project, which Lithium Americas is undertaking with General Motors (GM), is slated to become the Western Hemisphere's largest source of lithium when it opens in 2028, per Reuters, as well as a key project in bolstering the US's lithium supply chain.

Lithium Americas confirmed that it's in discussions with the Energy Department and GM regarding the Thacker Pass project and said \\"the company continues to work with the DOE and GM regarding proposals for a mutually agreeable resolution.\\"

Read more here.

European defense stocks rose on Wednesday after President Trump reversed his position on the Russia-Ukraine war, saying that Ukraine could regain all its territory and calling Russia a \\"paper tiger.\\"

Germany's Rheinmetall (RHM.DE) rose 2%, while the country's Hensoldt (HAG.DE) and Sweden's SAAB (SAAB-B.ST) added over 4% on an overall down day for the major European indexes. UK’s BAE Systems (BA.L) gained about 1%.

\\"I think Ukraine, with the support of the European Union, is in a position to fight and WIN all of Ukraine back in its original form,\\" Trump said on Truth Social on Tuesday afternoon. \\"With time, patience, and the financial support of Europe and, in particular, NATO, the original Borders from where this War started, is very much an option.\\"

Earlier on Tuesday, Trump told reporters that NATO countries should shoot down Russian military aircraft in their airspace, though he said it \\"depends on the circumstance\\" if the US would back up its allies.

Last week, the Fed voted to cut interest rates in a decision that expressed unity despite a sole dissent. But a mere week later, commentary from central bankers is foreshadowing disagreement to come, noted Yahoo Finance's Hamza Shaban.

He reports in today's takeaway from Morning Brief:

While Powell represents the consensus at the Fed, other policymakers don't view caution as the appropriate posture, since, in their view, the labor market is already flagging.

New Federal Reserve governor Stephen Miran said Monday he wants central bank interest rates to be roughly 2 percentage points lower, arguing that the current level is too high, posing risks to the economy.

Miran's remarks are hardly surprising. He was the dissenting vote at the September policy meeting after being installed by the White House amid its campaign to lower rates. He's even taking a leave of absence from his (still current) role as a White House economic adviser.

But while it might be tempting to cast Miran and his views as a sideshow on the losing side of an 11-to-1 vote, his influence is likely to grow as he works to convince his colleagues to adopt a more dovish approach — and as the conversation evolves from unity into an array of opinions.

Even now, he isn't exactly alone.

Read more here.

Economic data: MBA mortgage applications (week ending Sept. 19) New home sales (August); Building permits (August)

Earnings calendar: Cintas Corporation (CTAS), Uranium Energy Corp (UEC), KB Home (KBH)

Here are some of the biggest stories you may have missed overnight and early this morning:

The Fed's unity is already fraying

AI's big power problem sets natural gas up for a boom

Alibaba soars after hiking AI budget past $50 billion

Lithium Americas surges as Trump admin. seeks stake

S&P 500 resists drops of 2% in best run in over a year

Defense stocks jump in Europe, Asia after Trump's Ukraine shift

Crypto giant Tether seeks funding at $500 billion valuation

India seeks more US energy as trade talks resume

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 of 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 fell 1% in premarket trading on Wednesday following the release of its fourth quarter earnings report the day prior.

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

Here's what the memory chipmaker's execs said on an 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 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 so far in September — 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 this morning upgraded GM to Buy, saying it sees a better-than-expected margin outlook. I heard the same thing from Citi's Michael Ward in an upbeat note on Monday. Tariffs are still a risk to GM, but the automaker 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, and 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.”

Read more here.

Asian markets saw losses overnight as the region reacted to Wall Street's pause in a three-week rally.

AP Finance reports:

Japan's benchmark Nikkei 225 (^N225) lost 0.4% in morning trading to 45,300.30. Australia's S&P/ASX 200 (^AXJO) slipped 1.0% to 8,756.30. South Korea's Kospi (^KS11) dropped 1.1% to 3,448.44. Hong Kong's Hang Seng (^HSI) rose 0.6% to 26,305.02, while the Shanghai Composite gained 0.2% to 3,829.91.

U.S. stocks took a pause from their relentless rally, with the S&P 500 dipping 0.6%, the Dow Jones Industrial Average falling 88 points, or 0.2%, and the Nasdaq composite sinking 0.9%.

It’s the first pullback for the indexes after the trio set all-time highs in each of the last three days.

Read more here.

Reuters reports:

Oil prices rose for a second day on Wednesday as an industry report showed U.S. crude inventories declined last week, adding to a sense in the market of tightening supplies.

Brent futures (BZ=F) rose 27 cents to $67.90 a barrel by 0005 GMT. U.S. West Texas Intermediate crude futures (CL=F) gained 28 cents to $63.69.

Both benchmarks climbed by more than $1 a barrel on Tuesday as a deal to resume exports from Iraq's Kurdistan stalled, halting pipeline shipments of oil from the region to Turkey despite hopes of a deal to end the deadlock, as two key producers asked for debt repayment guarantees.

Read more here.