U.S. stocks rose Tuesday after a major AMD-Meta deal and AI optimism eased fears of widespread job losses.

U.S. stocks recovered Tuesday, with the S&P 500, Dow, and Nasdaq all rising 0.8% to 1%, following Monday's steep losses caused by fears of AI disrupting industries such as software and finance. A major multiyear deal between AMD and Meta Platforms, in which Meta will buy AI chips in exchange for the right to acquire up to 160 million AMD shares at one cent each, increased AMD's stock price by 8.8% and helped restore investor confidence. Anthropic's announcement of new AI tools for business applications, which include integration with FactSet data, suggested that AI could improve rather than replace existing systems, lifting related stocks. Strong earnings from Keysight Technologies, which increased by 23%, and other companies also fueled the rally. Global markets were mixed, with South Korea rising 2.1% and Hong Kong falling 1.8%, while Treasury yields remained unchanged at 4.03%.