NEW YORK, New York -  U.S. stocks closed higher on Wednesday, with the Nasdaq Composite and Standard and Poor's 500 closing at new record highs. The U.S. dollar continued higher, while gold rose to $4,050 an ounce.

Powering 2025's record-breaking run, AI stocks continued to dominate with Nvidia climbing nearly two percent. Demand for AI stocks continues with some, including the Bank of England warning the buying may be overdone. The UK central bank, in a meeting record of its 2 October Financial Policy Committee meeting, released on Wednesday said a bubble could be forming which could lead to a major equity markets correction. "On a number of measures, equity market valuations appear stretched, particularly for technology companies focused on Artificial Intelligence (AI). This, when combined with increasing concentration within market indices, leaves equity markets particularly exposed should expectations around the impact of AI become less optimistic," the bank said.

Not everyone however shares the Bank of England's view. "We know some of the things AI can do. We can all be impressed with some of the capabilities, but at the end of the day, there needs to be demand for the chips, demand for whatever the software layer that's built on top of all that compute looks like," Baird investment strategist Ross Mayfield told CNBC Wednesday. "The demand still being there – and Nvidia is obviously in the best position in the world to comment on that – I do think is reassuring that the level of spending capex isn't completely circular."

Then again, there are others that shareb the Bank of England's caution. "What we see at the moment is a market that's running extremely hard,.It's starting to look very speculative, very frothy, very greedy. And that's generally the kind of setup you get before you get a pullback," Chris Watling, global economist and chief market strategist at Longview Economics told Yahoo Finance on Wednesday.

The Standard and Poor's 500 rose 39.13 points, or 0.58 percent, to finish at 6,753.72, marking a fresh all-time high as strength in technology and consumer discretionary stocks lifted the index. The broad-based benchmark traded between 6,718.09 and 6,755.64 during the session.

The Dow Jones Industrial Average was little changed, slipping 1.20 points, or less than 0.01 percent, to close at 46,601.78. Blue-chip shares saw mixed performances, with gains in healthcare and financials offset by declines in industrial names.

The Nasdaq Composite led the day's gains, climbing 255.01 points, or 1.12 percent, to end at 23,043.38, buoyed by strong advances in semiconductor and large-cap tech shares. Investor enthusiasm around artificial intelligence and software growth continued to drive momentum in the sector.

Market participants are now turning their attention to Thursday's U.S. inflation report and fresh jobless claims data, which could shape expectations for the Federal Reserve's next policy move. Despite lingering concerns about global growth, investors appeared confident that central banks are nearing the end of their tightening cycles.

U.S. Dollar Strengthens Across Majors as Yen , British Pound and Euro Weaken

The U.S. dollar advanced against most major currencies on Wednesday, buoyed by firm Treasury yields and investor caution ahead of upcoming U.S. inflation data, while the yen continued to weaken past key psychological levels.

The euro slipped 0.28 percent to 1.1624 dollars, as traders reacted to the turmoil in French politics, and softer eurozone economic data and cautious comments from European Central Bank officials suggesting policy rates may stay higher for longer.

Against the Japanese yen, the dollar climbed 0.54 percent to 152.72, renewing concerns about potential intervention by Tokyo. The yen's decline reflected ongoing yield differentials between Japan and the U.S., with the Bank of Japan maintaining its ultra-loose stance.

The Canadian dollar was little changed, with the USD/CAD pair inching up 0.03 percent to 1.3953, as oil prices steadied after recent declines.

Sterling retreated modestly, with the British pound easing 0.16 percent to 1.3393 dollars, pressured by signs of slowing U.K. growth and persistent inflation concerns.

The Swiss franc weakened, as the USD/CHF pair rose 0.52 percent to 0.8018, reflecting the dollar's broad-based strength.

In commodity-linked currencies, the Australian dollar, going against the trend, gained 0.10 percent to 0.6586 dollars, supported by firmer metals prices and improving risk appetite in late trading. The New Zealand dollar, however, edged lower, falling 0.25 percent to 0.5784 dollars, weighed down by weaker domestic business sentiment data.

Overall, the dollar's resilience highlighted continued market confidence in the U.S. economy, even as traders brace for new inflation and employment figures later in the week that could influence the Federal Reserve's next policy move.

Global Markets Mixed Wednesday as UK and European Stocks Rally While Asia Ends Lower

Global equity markets delivered a mixed performance on Wednesday, with major Canadian, UK and European indices closing higher while several Asian benchmarks declined amid cautious investor sentiment.

In Canada, the S&P/TSX Composite Index advanced 150.27 points, or 0.50 percent, to 30,501.99, helped by strength in energy and materials stocks as commodity prices stabilized.

In London, the FTSE 100 advanced 65.29 points, or 0.69 percent, to close at 9,548.87, supported by gains in energy and financial shares. Frankfurt's DAX rose 211.35 points, or 0.87 percent, to 24,597.13, while Paris' CAC 40 gained 85.28 points, or 1.07 percent, finishing at 8,060.13.

Across the eurozone, the EURO STOXX 50 climbed 36.11 points (0.64 percent) to 5,649.73, and the Euronext 100 edged up 11.07 points (0.66 percent) to 1,696.46. Belgium's BEL 20 also strengthened, adding 27.95 points (0.57 percent) to close at 4,940.28.

In Asia, trading sentiment was more subdued. Hong Kong's Hang Seng Index slipped 128.31 points, or 0.48 percent, to 26,829.46, while Singapore's STI eased 15.96 points (-0.36 percent) to 4,456.30. Australia's S&P/ASX 200 dipped 9.20 points (-0.10 percent) to 8,947.60, and the broader All Ordinaries fell 8.80 points (-0.10 percent) to 9,244.80.

India's S&P BSE Sensex shed 153.09 points, or 0.19 percent, closing at 81,773.66, and Jakarta's IDX Composite was marginally lower by 3.25 points (-0.04 percent) at 8,166.03. Malaysia's KLCI slipped 2.53 points (-0.16 percent) to 1,627.50, while Taiwan's Weighted Index fell 148.27 points (-0.54 percent) to 27,063.68.

South Korea's KOSPI Composite Index stood out with a sharp 2.70 percent rally, jumping 93.38 points to 3,549.21, driven by strong semiconductor and tech sector gains. New Zealand's S&P/NZX 50 rose 0.27 percent to 13,568.48, marking a modest but steady climb.

Elsewhere, Israel's TA-125 slipped 0.17 percent to 3,264.68, while Egypt's EGX 30 added 0.75 percent to 37,376.90, buoyed by strong financial shares. In Johannesburg, the All Share Index (JN0U.JO) gained 1.76 percent to 6,505.04.

In China, the Shanghai Composite rose 0.52 percent to 3,882.78, reflecting optimism over domestic policy easing. However, Japan's Nikkei 225 fell 215.89 points, or 0.45 percent, to 47,734.99, as investors took profits after recent highs.

Overall, markets reflected a balance between optimism over European growth prospects and lingering caution in Asia, with traders awaiting key U.S. inflation data later this week.

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