U.S. stock indexes were mixed, with technology shares rising on yet another strong earnings report from Nvidia, countering weakness in the rest of the market.
NEW YORK — U.S. stock indexes were mixed Thursday. While NVIDIA reported another strong performance, technology stocks rose, while the rest of the market weakened. In the latest example of how good news for the economy isn’t necessarily good for Wall Street, reports of accelerating growth in U.S. business activity have fueled concerns that interest rates will remain high. caused it.
The S&P 500 rose 0.1% in morning trading. As of 10 a.m., the Nasdaq Composite Index was up 0.5% as tech stocks rose. The Dow Jones Industrial Average, which is less heavily focused on tech stocks, lagged the market, dropping 216 points, or 0.5%.
Nvidia shares soared 8.7% after the company released its latest stunning earnings report late Wednesday. The company’s latest quarterly revenue rose 262% year over year, and profits grew a staggering 629%. Demand for the company’s chips, which help train artificial intelligence systems, is strong.
Nvidia also increased its dividend after CEO Jensen Hwang touted that “the next industrial revolution has begun.”
Wall Street’s enthusiasm for the potential of AI has created a bubble, raising concerns that prices and expectations are too high. But Nvidia’s continued rapid growth has made it one of the most influential stocks on Wall Street, helping other stocks rally even higher.
AMD rose 1.2% along with other semiconductor companies. Supermicrocomputers, which sell servers and storage systems used for AI and other computing, jumped 5.7%.
News Corp. announced a deal to transfer content from the Wall Street Journal, New York Post and other news businesses to OpenAI, sending shares up 2.2%.
But most stocks on Wall Street fell as bond markets came under increasing pressure from rising U.S. Treasury yields. Several reports suggesting the U.S. economy remains strong forced traders to reconsider some bets about when the Federal Reserve could rescue financial markets by cutting interest rates.
The Fed is trying to accomplish the difficult feat of slowing the economy through high interest rates enough to keep inflation under control, but not so much as to force a painful recession, which has kept its key interest rate at its highest in more than two decades and has Wall Street clamoring for some easing.
Expectations for at least one rate cut this year remain high after some encouraging reports on inflation and parts of the economy recently. However, preliminary data on Thursday suggested that U.S. business activity continued to grow at the highest rate in more than two years. S&P Global reported that company growth improved in both the services and manufacturing sectors.
Meanwhile, a separate report showed the U.S. job market remains strong despite high interest rates: Fewer workers applied for unemployment benefits last week than economists expected, suggesting layoffs remain relatively low.
Treasury yields were nearly flat following the unemployment report but turned higher shortly after the subsequent business activity report.
The yield on the 10-year Treasury note rose to 4.47% from Wednesday’s close of 4.43%. The yield on the two-year Treasury note, which is more in line with the Federal Reserve’s expected action, rose to 4.92% from 4.87%.
High interest rates are making everything from credit card payments to car loans more expensive. Tighter mortgage rates are also hurting the economy, with new home sales falling more than economists expected last month, according to a report Thursday.
Homebuilder Lennar fell 0.9%.
The worst decliner on Wall Street was VF Corporation, which owns brands such as The North Face, Vans and Timberland. Shares fell 8% after reporting a loss for the latest quarter, as well as a revenue decline that was lower than analysts expected.
Overseas stock markets, European and Asian stock indexes were mixed. Japan’s Nikkei rose 1.3%, helped by strength in semiconductor companies after Nvidia’s strong earnings report. Hong Kong’s stock index fell 1.7%, while Shanghai’s fell 1.3%. A flurry of new policies to end the crisis in China’s real estate sector are raising questions about whether they are enough.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
