Dow, S&P 500, Nasdaq Rise as ASML Raises Sales Forecast on AI Demand

TLDR

ASML raised its annual sales forecast above Wall Street expectations, citing strong AI demand The chipmaker plans to increase production capacity for chipmaking equipment by 30% Producer Price Index data showed wholesale inflation slowed faster than expected in June Morgan Stanley, BlackRock, and Johnson & Johnson all reported earnings before the bell UBS warns that beating estimates alone is no longer enough — companies must beat and raise

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US stocks moved higher on Wednesday as chipmaking equipment company ASML gave investors a reason to feel good about the AI trade. The company raised its annual sales forecast above Wall Street estimates, pointing to strong demand driven by artificial intelligence.

ASML also said it plans to grow its production capacity for chipmaking equipment by 30%. That helped ease concerns about potential bottlenecks in the chip supply chain.

The Nasdaq Composite climbed 0.6%, while the S&P 500 added 0.3% and the Dow Jones Industrial Average rose around 0.2%. Tech stocks led the gains.

E-Mini S&P 500 Sep 26 (ES=F)

Separately, the Producer Price Index showed wholesale inflation cooled faster than expected in June. That followed Tuesday’s Consumer Price Index report, which showed the largest single-month drop in inflation since April 2020.

Together, the two inflation readings gave investors more confidence heading into the Federal Reserve’s Beige Book release and Fed Chairman Kevin Warsh’s second day of testimony before the Senate Banking Committee.

Rising oil prices created some pressure on the market. President Trump said he would step up attacks on Iran unless the country agrees to negotiate, telling Fox News: “We’re going to knock out all of their bridges unless they get to the table.”

Earnings Season Heats Up

Earnings season continued to ramp up on Wednesday. Morgan Stanley, BlackRock, and Johnson & Johnson all reported results before the market opened.

United Airlines was set to report after the close of trading.

Wall Street’s overall mood around earnings remains positive, but the bar is getting higher. UBS Wealth Management’s Charlie Anderson said strong earnings can keep pushing stocks higher, but companies now need to beat estimates and raise their guidance — not just meet expectations.

That pressure was on full display with IBM, which saw its stock collapse 25% after disappointing results.

The gap between individual stock moves and broader index performance has become a key theme this earnings season. Stocks that beat and raise are being rewarded. Those that miss are being punished hard.

Analysts say this kind of market environment puts a premium on stock selection. Broad index moves matter less when individual company results are driving such wide swings.

Most stocks participated in Wednesday’s rally, with treasury yields dipping on the back of the cooler wholesale inflation data.

Market volatility, as measured by the fear index, remains low. Investors have been rotating back into tech stocks as AI demand signals stay strong.

ASML’s updated forecast and production expansion plans were the standout catalyst of the session, reinforcing confidence that demand for chipmaking equipment tied to AI buildout remains on solid ground.

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