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Wall Street Inches to More Records 06/02 15:24
The U.S. stock market inched to more records Tuesday as winners of the
artificial-intelligence boom kept driving higher.
NEW YORK (AP) -- The U.S. stock market inched to more records Tuesday as
winners of the artificial-intelligence boom kept driving higher.
The S&P 500 rose 0.1% after drifting between small gains and losses through
the day. The Dow Jones Industrial Average added 228 points, or 0.4%, and the
Nasdaq composite edged up by less than 0.1%. All three set all-time highs.
Hewlett Packard Enterprise helped lead the market, and its stock soared
19.5% after it reported a profit for the latest quarter that blew past
analysts' expectations. It credited demand from customers building their
artificial-intelligence capabilities.
Marvell Technology leaped 32.5% for its best day since its stock began
trading in 2000 after Nvidia's CEO, Jensen Huang, suggested at a conference in
Taiwan that Marvell could be "the next trillion-dollar company." The last
company to enter the expanding club of behemoths was Micron Technology, which
is likewise riding the AI wave. Nvidia, which slipped 0.7%, has seen its total
value top $5 trillion.
Generac climbed 5.7% after saying it signed a deal to provide backup power
generators to an unnamed "leading hyperscale data center operator."
Such "hyperscalers" are spending tremendous amounts of money to build huge
AI data centers, which are powering what proponents believe is the next great
revolution for the global economy.
Alphabet is one of those hyperscalers, and the parent company of Google said
it's raising $80 billion in cash to help pay for its investments by selling
shares of its stock. It's planning to spend as much as $190 billion on
equipment and other investments this year.
That's more than all the stock of The Walt Disney Co. is worth, and Alphabet
is forecasting its spending on investments next year will "significantly
increase."
Such huge sums raise the question about whether AI can produce the profits
and productivity necessary to make all the investment worth it. Critics have
already been talking about the possibility of a bubble in AI investment, and
Alphabet's stock fell 3.9%. It was one of the heaviest weights on the S&P 500.
All told, the S&P 500 rose 9.82 points to 7,609.78. The Dow Jones Industrial
Average gained 228.91 to 51,307.79, and the Nasdaq composite inched up 7.09 to
27,093.90.
Analysts have been saying the broad U.S. stock market may be set for a
slowdown following an unrelenting streak of nine straight winning weeks for the
S&P 500, its longest since 2023. The rally has been largely due to strong
profit reports from U.S. companies, as well as hopes that the United States and
Iran will reach a deal to reopen the Strait of Hormuz. That would allow oil to
flow freely again from the Persian Gulf and hopefully lower its price.
In the oil market, prices rose again to claw back more of last week's slump.
Brent crude oil, the international standard, climbed 1.1% to settle at $96.00
per barrel, and it's still well above its roughly $70 level from before the war.
In the bond market, Treasury yields were relatively steady.
The yield on the 10-year Treasury slipped to 4.45% from 4.47% late Monday.
It briefly jumped after a report said that U.S. employers were advertising many
more jobs at the end of April than economists expected, a potential signal of
continued health for the U.S. labor market. But it quickly pulled back to where
it was just before the report's release.
High yields worldwide recently have threatened to slow economies and
undercut prices for stocks and all kinds of other investments. They have
already forced the average long-term U.S. mortgage rate to its most expensive
level in nine months, and they could curtail companies' borrowing to build the
AI data centers that have supported the U.S. economy's growth recently.
In stock markets abroad indexes rose across much of Europe and Asia.
Hong Kong's Hang Seng jumped 2.5% for one of the world's biggest moves.
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