AI stocks lead Wall Street
Technology stocks led Wall Street on Thursday after Nvidia, Salesforce and others reported even stronger profits for the spring than analysts expected.
The S&P 500 rose 0.7% and pulled closer to its all-time high set earlier this month. The Dow Jones Industrial Average added 105 points, or 0.2%, and the Nasdaq composite climbed 1.6%.
Nvidia was the strongest force pulling the market higher, and the chip giant rallied 8.7% after once again delivering stronger profit and revenue for the latest quarter than analysts expected. More importantly for Wall Street, it also gave forecasts for upcoming revenue growth that topped analysts' estimates, suggesting demand remains strong for chips to power artificial-intelligence projects.
"AI has reached its inflection point," Nvidia CEO Jensen Huang said. "It's doing useful work. Its tokens are productive and profitable."
That helped calm some of the worries that have built around AI stocks generally, which have been under pressure recently. After rocketing higher for years because of the frenzy around AI, stocks in the industry are confronting scepticism that they shot too high and that booming demand for AI chips may fade if the AI revolution does not produce as much profit as promised.
Salesforce jumps
Another big tech company, Salesforce, jumped 22.6% after it said AI helped it deliver one of its best quarters in history. It reported stronger profit than analysts expected, and CEO Marc Benioff said it's "seeing incredible demand for our AI and data products" and that it's "turning AI into customer success at unprecedented scale."
Salesforce, which helps companies manage their customers' data, also raised its forecast for revenue over the full year and announced an expanded partnership to pair Anthropic's Claude chatbot with its platform. It's notable because Salesforce's stock struggled earlier on worries that competitors powered by AI could ultimately steal away customers from Salesforce and other software companies. Salesforce's stock had its best day in six years.
Broader market mixed
Elsewhere, though, trends were more mixed across big US companies, and the majority of stocks within the S&P 500 fell.
One potential winner from high inflation could be dollar stores, which could see higher-income households become new customers as they look for less expensive places to shop.
All told, the S&P 500 rose 55.29 points to 7,730.99. The Dow Jones Industrial Average added 105.56 to 53,569.44, and the Nasdaq composite rose 411.16 to 26,541.35.
US Treasury bond yields tick higher
In the bond market, Treasury yields ticked higher following a report suggesting the US job market remains solid. Fewer US workers applied for unemployment benefits last week, an indication that layoffs could be remaining low.
The yield on the 10-year Treasury rose to 4.67% from 4.66% late on Wednesday.
Yields have been largely climbing through the summer on worries about high inflation, the US government's gargantuan and growing debt and other factors. They got so high that the US Treasury Department made a surprise announcement last week to intervene in the bond market, though analysts say its effect could be limited.
The next big event for the bond market will be a speech coming on Friday from the chairman of the Federal Reserve, Kevin Warsh. He has been adamant about giving financial markets fewer clues about what the Fed will do in the future with interest rates to control inflation. But the pressure is on him to give clearer guidance.
Oil prices rise
One wild card for inflation has been oil prices, which have been swinging with uncertainty about when the war with Iran will allow oil tankers to freely exit the Persian Gulf again. The price for a barrel of Brent crude, the international standard, rose 1.8% on Thursday to $US88.52.
The Associated Press
