Stock markets rebounded on Wednesday as optimism over artificial intelligence investments helped offset concerns sparked by Federal Reserve Chairman Jerome Powell's cautious comments on interest rates. Wall Street's main indices opened higher after finishing the previous session lower, with technology shares leading the recovery amid growing corporate commitments to AI development.

The market's positive momentum follows a months-long equity rally that has pushed some indices to record highs, though Tuesday's trading session saw a pause in the upward trend as investors reassessed valuations. Trade Nation analyst David Morrison characterized the previous day's selloff as shallow, noting that "the general feeling is... that any pullback is a buying opportunity." This sentiment reflects the underlying confidence in the market's fundamentals despite recent volatility.

Powell's warning on Tuesday that there was "no risk-free path" on interest rates tempered expectations for aggressive rate cuts, with the Fed chief noting that reducing rates too quickly could risk reigniting inflation. He also observed that stocks appear "fairly highly valued," a comment that Briefing.com analyst Patrick O'Hare said was not particularly revelatory given that analysts have been discussing elevated valuations for some time. The market's hopeful view continues to be supported by the absence of a "disillusioning fundamental catalyst," O'Hare added.

Investors are now awaiting key economic indicators that could influence the Fed's policy decisions, including Friday's release of the personal consumption expenditure (PCE) index—the central bank's preferred inflation measure—and important jobs data due next week. The ongoing AI investment boom, exemplified by corporate announcements like Alibaba's plan to significantly increase AI spending, provides a counterbalance to rate concerns, creating a delicate equilibrium between technological optimism and monetary policy caution.

London's Metropolitan Police has reversed its longstanding position on grooming gangs in the capital, acknowledging for the first time that it has multiple active investigations into group-based child sexual exploitation. The shift came after an investigation by MyLondon and The Daily Express challenged official statements from both police leadership and Mayor Sadiq Khan, who had consistently maintained there were "no reports" or "no indication" of Rochdale or Rotherham-style rape gangs operating in London.

The investigation uncovered evidence from four separate His Majesty's Inspectorate of Constabulary and Fire & Rescue Services reports spanning 2016 to 2025 that documented at least six potential victims of grooming gang abuse. These case studies, which the Mayor of London personally responded to according to public statements, described children as young as 13 being exploited by groups of predatory men. The reports detailed how girls were plied with drugs and alcohol, raped in hotels by multiple perpetrators, and subjected to life-threatening situations.

Metropolitan Police Commissioner Sir Mark Rowley revealed to Assembly Members at City Hall that the force now acknowledges a "steady flow" of live multi-offender child sexual exploitation investigations and a "very significant" number of historic cases requiring reinvestigation. The commissioner estimated these reviews would cost "millions of pounds a year, for several years" to properly investigate, contradicting previous assertions that the force had "not seen" such cases in London.

Political figures including Reform UK MP Lee Anderson and Shadow Home Secretary Chris Philp have criticized the mayor's handling of the situation, with Anderson stating there is "real, credible evidence that grooming gangs exist in London" and Philp alleging that Khan is "facilitating a cover-up." A spokesman for the mayor maintained that Khan has "always been clear that the safety of Londoners is his top priority" and remains "committed to doing all he can to protect children in London."