Wall Street ends higher as AI capex fears pause, Fed decision looms

Wall Street closed higher as concerns over the pace of artificial intelligence capital spending eased, with investors pausing their selloff ahead of a pending Federal Reserve policy decision. The move reflects a shift in risk appetite: when hyperscaler capex worries recede, the market reprices the expected return on massive data center and chip outlays, supporting megacap equities that carry the largest AI infrastructure commitments. The S&P 500 and Nasdaq 100 are most exposed, given their heavy weighting in Microsoft, Alphabet, and Amazon, whose earnings sensitivity to cloud and AI spending is high. The dollar is also exposed through the rate channel, since expectations for the Fed's next move shape real yield differentials and capital flows into U.S. assets. Traders should watch the Fed's rate statement and press conference for guidance on the policy path, alongside any updated commentary on AI-related capital expenditure from the major cloud providers.

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