Wall Street has found a new way to play artificial intelligence on Fed day, and it runs through the plug socket rather than the chip. Vertiv, the company that keeps data centres powered and cool, rose about 16 percent before the open on Wednesday after a blowout quarter, and the rest of the electricity crowd came along for the ride. That matters because Wednesday is already one of the heaviest days of the season: the Federal Reserve announces its rate decision at 2 p.m. Eastern Time, Kevin Warsh speaks half an hour later, and Microsoft and Alphabet report after the close. Traders are choosing to back the companies that get paid whoever wins the AI arms race, while handing out harsh treatment to anything that disappoints.
The power trade is a logical response to a year in which chip stocks have soared and then corrected, and in which the physical limits of AI have become harder to ignore. Data centres need power, cooling, backup systems and grid connections, and those needs grow with every new model, whether the model itself succeeds or fails. GE Vernova and GE HealthCare also reported on Wednesday morning, reinforcing a shift in conversation from chips and apps toward the hardware that keeps the lights on. For investors, the appeal is straightforward: a power supplier does not need to pick the winning AI company, because it sells to all of them.
Tuesday set the stage
Tuesday’s session showed why traders are looking for a new leadership story. The Nasdaq Composite rose 1.2 percent to 26,477.81 and the S and P 500 added 0.6 percent to 7,722.60, while the Dow rose just 16 points to 52,377.57, with 19 of its 30 components ending lower. Six of the 11 tracked sectors fell, semiconductors climbed 3.02 percent and technology led with a 1.70 percent gain. The equal weight S and P fund gained only 0.11 percent against 0.56 percent for the cap weighted fund, a sign that the rally was concentrated rather than broad. Futures before Wednesday’s open were firm but not frantic, with S and P 500 futures up around 0.2 percent near 7,772 and Nasdaq 100 futures up about 0.45 percent near 29,945.
In Asia, South Korea’s KOSPI closed up 6.6 percent on a record quarter from SK Hynix, and Taiwan gained 2 percent, while volatility stayed calm with the VIX near 17.5. The 10 year Treasury yield eased slightly to near 5.01 percent. None of those figures settles Wednesday’s questions, but together they describe a market that is optimistic about AI demand and nervous about concentration, and that is looking for leadership in the companies that supply the infrastructure behind the boom.
After the close, the verdict
The evening will test whether that optimism is justified. Microsoft reports first quarter fiscal 2027 results with a call at 5:30 p.m., and Alphabet reports after the close with a call at 4:30 p.m., with options markets implying moves of about 5.09 percent and 5.99 percent respectively. Reports of Tuesday’s session described a market buoyed by AI, stronger data and lower oil prices, and Media Rounds’ account of trust in a fragile process is a useful parallel: markets, like ceasefires, depend on whether the next step confirms the last one. Vertiv’s jump suggests investors believe the power story. Microsoft and Alphabet will show whether the AI story itself still earns that belief.
