Wall Street stocks forged higher Wednesday, propelled by resurgent optimism about AI while oil prices tumbled on trade war uncertainty and bearish US petroleum inventory data.Shares of Google parent Alphabet took a hit, slumping around seven percent after the company announced plans to spend an eye-popping $75 billion in 2025 on AI development programs.But AI-linked companies such as Arm, Broadcom and Nvidia surged higher in anticipation of strong performances.”The market has kind of separated out the weakness seen in Alphabet as sort of just an Alphabet issue,” Briefing.com’s Patrick O’Hare told AFP.”You take that big CapEx number and that’s a little bit staggering, obviously,” he said.”If they’re going to spend $75 billion in 2025, that should be pretty good for, you know, a company like Nvidia,” he added, referring to the major chip designer whose shares closed 5.2 percent higher.The move “helped energize the AI trade a bit,” he added. Following a mixed day on European and Asian bourses, all three major US indices advanced. The S&P 500 finished 0.4 percent higher.Tensions between the United States and China have soared in recent days as the world’s two largest economies slapped a volley of import tariffs on each other.Analysts noted that China’s tariff response this week was relatively modest, providing some hope that a full-blown crisis could be avoided.But “the problem with trade wars is they can escalate quickly, leading to potential issues such as inflation, job losses and even recession”, said Kate Marshall, lead investment analyst at Hargreaves Lansdown. Hong Kong’s stock market closed down nearly one percent, with e-commerce giant JD.com sinking almost four percent and rival Alibaba also falling after US Postal Service officials suspended a duty-free exemption for low-value packages imports from China. In an apparent climbdown, the USPS on Wednesday morning said it would “continue accepting all international inbound mail and packages from China and Hong Kong Posts.”Beijing had responded with fury to the move, accusing the United States of “politicizing trade and economic issues and using them as tools.”Uncertainty about US-China relations also weighed on the oil market, with major crude contracts losing more than two percent.Crude prices were also dented by weekly US stockpile data that showed commmercial stocks rose 8.7 million barrels, more than four times the expected amount.In company news, shares in Japan’s Nissan fell around five percent following reports that the carmaker decided to withdraw from merger talks with rival Honda.Shares in Honda soared more than eight percent by the close.- Key figures around 2140 GMT -New York – Dow: UP 0.7 percent at 44,873.28 (close)New York – S&P 500: UP 0.4 percent at 6,061.48 (close)New York – Nasdaq Composite: UP 0.2 percent at 19,577.02London – FTSE 100: UP 0.6 percent at 8,623.29 (close) Paris – CAC 40: DOWN 0.2 percent at 7,891.68 (close)Frankfurt – DAX: UP 0.4 percent at 21,585.93 (close)Tokyo – Nikkei 225: UP 0.1 percent to 38,831.48 (close)Hong Kong – Hang Seng Index: DOWN 0.9 percent to 20,597.09 (close)Shanghai – Composite: DOWN 0.7 percent to 3,229.49 (close)Euro/dollar: UP at $1.0397 from $1.0379 on TuesdayPound/dollar: UP at $1.2502 from $1.2480Dollar/yen: DOWN at 152.63 yen from 154.34 yenEuro/pound: FLAT at 83.16 pence West Texas Intermediate: DOWN 2.3 percent at $71.03 per barrelBrent North Sea Crude: DOWN 2.1 percent at $74.61 per barrelburs-jmb/dw