US STOCKS-Wall St advances after strong bank earnings, chip stocks' rally

Morgan Stanley's shares hit a record high and were last up 5.5%, while Bank of America rose 4.9% after the top lenders beat Wall Street estimates for third-quarter profit on dealmaking strength. The S&P 500 banking index rose 1.9% and was set to log its first three-day winning streak in more than three weeks.

Wall Street's major indexes rose Wednesday, supported by solid results from Morgan Stanley and Bank of America that capped big-bank earnings, while semiconductor shares climbed on renewed enthusiasm over artificial intelligence. Morgan Stanley's shares hit a record high and were last up 5.5%, while Bank of America rose 4.9% after the top lenders beat Wall Street estimates for third-quarter profit on dealmaking strength.

The S&P 500 banking index rose 1.9% and was set to log its first three-day winning streak in more than three weeks. A day earlier, lenders including Goldman Sachs and JPMorgan Chase reported solid performance in investment banking and predicted that the business would continue to boom.

"It's an encouraging start to the earnings season from the banks," said Josh Jamner, senior investment strategy analyst at ClearBridge Investments. "The read through to the health of the consumer which had come under question over the last couple of weeks, seems to be sending a more positive message in light of bank earnings."

The results indicate early strength in the third-quarter earnings season in corporate America, providing a proxy for the economy while government reports remain on hold. The Philadelphia Semiconductor Index rose 2.7% as ASML

reported third-quarter orders and operating income above market expectations. U.S.-listed shares of ASML advanced 2.9%.

An investment consortium including BlackRock, Microsoft and Nvidia will buy

one of the world's biggest data center operators in a $40 billion deal. Shares of data center firms rose, with Applied Digital surging 7.6%. At 12:11 p.m. ET, the Dow Jones Industrial Average rose 111.38 points, or 0.24%, to 46,380.79, the S&P 500 gained 32.59 points, or 0.49%, to 6,677.19 and the Nasdaq Composite gained 166.39 points, or 0.75%, to 22,689.83.

The S&P 500 tech sector rose about 1%. Communication services gained 1.1%, while industrials declined 0.4%. U.S. Treasury Secretary Scott Bessent told CNBC that Washington did not want to escalate a trade conflict with China, stressing that President Donald Trump is ready to meet Chinese President Xi Jinping in South Korea later this month.

Meanwhile, Trump on Tuesday said Washington was considering cutting some trade ties with China, including in relation to cooking oil. That came after the two countries began imposing tit-for-tat port fees. Bessent also said he plans to present three or four Federal Reserve chief candidates to Trump for him to interview sometime after Thanksgiving.

A slate of Fed officials will speak through the day. Fed's Beige Book of economic condition is also on radar. Fed Governor Stephen Miran at a CNBC event said "two more cuts this year sounds realistic", noting that the labor market has clearly weakened.

Fed Chair Jerome Powell had also left the door open to rate cuts on Tuesday. Among other stocks, Abbott declined 3.2% on downbeat quarterly revenue.

Progressive Corp lost 6.8% after the insurer reported third-quarter results. Bunge jumped 11.6% despite the company

lowering its 2025 earnings forecast following its merger with Viterra.

Advancing issues outnumbered decliners by a 2.15-to-1 ratio on the NYSE and by a 1.61-to-1 ratio on the Nasdaq. The S&P 500 posted 33 new 52-week highs and two new lows, while the Nasdaq Composite recorded 134 new highs and 26 new lows.