Wall Street rises as strong earnings from AI-linked stocks lift investor confidence despite inflation concerns ahead of Big Tech results

Elon Musk's company beat Wall Street forecasts on third-quarter earnings and revenue, fuelled by its booming artificial intelligence business. Its shares jumped 9.8% after Musk said on Tuesday that merging SpaceX with Tesla would be 'a good idea'. The Nasdaq climbed 1.12% to 26,721.10. AI server maker Super Micro Computer also soared after forecasting revenue of up to $19.5 billion.

The rally follows a selloff in AI stocks last week, sparked by heavily indebted CoreWeave.

London's FTSE 100 edged up 0.2% even as UK inflation hit 3.5%, piling pressure on Chancellor John Healey.

One analyst said SpaceX 'could swallow up' AI infrastructure business from smaller rivals.