The New York Stock Exchange, center, is shown on Tuesday, June 4, 2024. Shares in Europe and Asia were mostly lower on Tuesday after a report showed that U.S. manufacturing contracted in May. (AP Photo/Peter Morgan, File)
NEW YORK (AP) – Wall Street is barreling toward records Wednesday as technology stocks keep rushing higher. The rally sent the total market value of Nvidia, the stock that’s become the poster child of the artificial-intelligence boom, above $3 trillion for the first time.
The S&P 500 was 1.1% higher in late trading and on track to beat its record set two weeks ago. The Nasdaq composite was up even more, 1.8%, and likewise on pace to set an all-time high, with less than an hour remaining in trading. The Dow Jones Industrial Average, which has less of an emphasis on tech, was lagging the market with a gain of 97 points, or 0.3%.
Some fatter-than-expected profit reports from tech companies helped drive the market. Hewlett Packard Enterprise jumped 11.8% after saying strong sales related to artificial-intelligence systems helped it deliver better results than expected. It also raised its financial forecasts for the year.
A frenzy on Wall Street around AI has catapulted stocks, almost regardless of what the broader economy and interest rates are doing. Nvidia rose another 5% to bring its gain for the year to 147%. Its chips are powering much of the rush into AI, and Nvidia again was the strongest force lifting the S&P 500 by far.
Nvidia joined Microsoft and Apple as the only U.S. stocks to top $3 trillion in total value. Apple regained the milestone valuation during trading Wednesday.
Other big tech stocks also drove the market higher, including a 5.3% rise for Broadcom, 3.3% rally for Meta Platforms and 1.7% gain for Microsoft. Cybersecurity company CrowdStrike climbed 11.4% after delivering better profit and revenue fort he latest quarter than expected.
They helped offset a 5.6% drop for Dollar Tree, which matched analysts’ expectations for profit but fell just shy for revenue. The retailer also said it’s considering selling or spinning off its Family Dollar business.
The broad retail industry has been highlighting challenges for lower-income U.S. households, which are trying to keep up with still-high inflation.
Treasury yields fell in the bond market following some mixed data on the economy. One report said real estate, health care and other businesses in the U.S. services sector returned to growth last month and blew by economists’ forecasts. Perhaps more importantly for Wall Street, the report from the Institute for Supply Management also said prices rose at a slower pace in May than a month before.
Another report in the morning suggested hiring slowed last month by more than expected at U.S. employers outside the government.
Stocks have generally been shaky recently after reports suggested the U.S. economy’s growth is fading under the weight of high interest rates. Wall Street has actually been hoping for such a slowdown because it can drive down inflation and convince the Federal Reserve to deliver much-desired cuts to interest rates. But it also raises the possibility of overshooting and sending the economy into a recession, which would ultimately hurt stock prices.
Treasury yields have sunk sharply after the weaker-than-expected economic reports raised expectations for coming cuts to rates by the Federal Reserve.
The yield on the 10-year Treasury eased to 4.28% from 4.33% late Tuesday. It’s well below the 4.60% that it reached a week ago.
The next big move for Treasury yields and Wall Street overall could come Friday, when the U.S. government releases its monthly jobs report. That report is much more comprehensive than Wednesday’s from ADP, which focuses only on the private sector, and economists expect Friday’s data to show a slight pickup in overall hiring. The hope continues to be that the job market slows its growth but not so much that it devolves into widespread layoffs.
The worst-case scenario for markets would likely be if data on the jobs market and the rest of the economy come in stronger than expected, according to JJ Kinahan, CEO of IG North America. That could push the Federal Reserve to consider hiking its main interest even further, which would put further strain on the economy and investment prices. The federal funds rate has been sitting at its highest level in more than two decades.
But Kinahan says he sees this scenario as less likely than others.
In stock markets abroad, indexes rose across much of Europe. Investors expect the European Central Bank to cut interest rates at its meeting on Thursday amid worries about a flaccid economy.
Stocks fell across much of Asia, with indexes falling 0.9% in Tokyo and 0.8%, but they rose 1% in Seoul.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
