NEW YORK (AP) — The U.S. stock market is ticking toward more records Tuesday as winners of the artificial-intelligence boom keep driving higher.
The S&P 500 rose 0.2% a day after setting its latest all-time high. The Dow Jones Industrial Average was up 140 points, or 0.3%, as of 11:30 a.m. Eastern time, and the Nasdaq composite was 0.2% higher. All three indexes erased modest losses from earlier in the morning.
AI chip companies helped drive the market
upward. Their growth has skyrocketed because of how hungry customers are for more AI computing power, and Broadcom rose 4.4%, while Nvidia added 0.7%.
Marvell Technology leaped 28.4% toward its best day in three years after Nvidia’s CEO, Jensen Huang, suggested at a conference in Taiwan that Marvell could be “the next trillion-dollar company.” The latest entry into the growing club was last week by Micron Technology, which is likewise riding the AI wave. Nvdia's total value, meanwhile, has exploded over $5.8 trillion.
Hewlett Packard Enterprise's stock soared 23.3% after it reported a profit for the latest quarter that blew past analysts’ expectations. It credited demand from customers building their AI capabilities.
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 the huge AI data centers that are powering what proponents believe will be the next great revolution for the global economy.
Alphabet is one of them, 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 1.8%.
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 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 were calmer following Monday’s bounce back. Brent crude oil, the international standard, fell 0.3% to $94.67 per barrel, though that’s still well above the roughly $70 level it was at 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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AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.
