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Dow ends 400 points higher as investors buy AI stocks; Microsoft rallies

By Sohail Khan 26 September 2026, 1:41 am

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Dow ends 400 points higher as investors buy AI stocks; Microsoft rallies
Synopsis

Wall Street experienced gains on Friday, driven by positive performance from Microsoft and AI-related technology stocks. High oil prices and rising US Treasury yields created investor uncertainty throughout the week. Various industries are under scrutiny regarding their prospects related to artificial intelligence advancements. Additionally, traders faced a potential interest rate increase by the Federal Reserve in October.

Wall Street ended higher on Friday, lifted by Microsoft and other AI-related technology stocks, while high oil prices and a recent surge in US Treasury yields kept investors on edge.

The S&P 500 gained 37.96 points, or 0.49%, to end at 7,742.09 points, while the Nasdaq Composite gained 125.51 points, or 0.47%, to 27,064.88. The Dow Jones Industrial Average rose 469.07 points, or 0.91%, to 51,819.05.

Gains in the S&P 500 and Nasdaq capped a volatile week driven by uncertainty about what industries will win and lose from artificial intelligence, and by concerns about the US war with Iran and a surge in US Treasury yields.

Microsoft rallied after the software giant unveiled several new capabilities in its Copilot app, including a coding tool and an always-on AI agent.

Akamai Technologies surged after an $11.6 billion cloud services deal with AI leader Anthropic. The deal includes a warrant that could give Anthropic up to 5% of Akamai.

"That's a positive from the standpoint that people are still investing, deals are still being done," said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta. "It's another circular deal, so OK … but Akamai stock is up."

Chip maker Qualcomm gained and Dell also advanced.

Meta Platforms dipped. The social media company's stock has soared about 13% this week amid a strong reception to its Muse AI agent, which analysts say could benefit tech infrastructure stocks, while challenging banks, online shopping platforms and other consumer businesses.

The S&P 500 this week has traded just under 19 times expected earnings, its lowest valuation since 2023, according to LSEG data. AI-related heavyweights are responsible for much of the recent increase in earnings expectations.

A report that US and Iranian negotiators continued to explore a phased path out of the war, which would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade, helped market sentiment.

Data also showed strong AI-related capital expenditures boosted demand for key manufactured capital goods, outpacing expectations in August.

Brent crude eased but remained above $100 a barrel. The yield on the benchmark US 10-year Treasury note hit a fresh 19-year high and was last up 3.4 basis points at 5.196%.

Traders see a 66% chance of the Federal Reserve increasing interest rates by at least 25 basis points in October, up from around 50% earlier this week, the CME Group's FedWatch Tool showed.

US President Donald Trump said he had a "very productive meeting" with President Xi Jinping, following a three-day summit that showcased personal diplomacy rather than big breakthroughs in economic relations.

Magazine publisher People Inc jumped after a report said MGM Resorts International was discussing a bid for the company.

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