Stan Cho, The Associated Press
1 hour ago
At left is the New York Stock Exchange on Wednesday, July 10, 2024. European stocks opened higher after most Asian markets fell, while Tokyo’s Nikkei average closed at a record high. (AP/Peter Morgan)
NEW YORK (AP) — U.S. stocks were mostly higher Wednesday, putting Wall Street on track for more records.
The S&P 500 was up 0.2% at the start of trading, on track to hit its 37th all-time high this year. The Dow Jones Industrial Average was up 23 points, or 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq Composite was 0.4% above its all-time high.
Big technology companies are leading the way, which has become commonplace on Wall Street. Taiwan Semiconductor Corp.’s U.S.-listed shares rose 1.8% after the company said its June revenue rose about 33% from a year earlier.
Taiwan Semiconductor Co. (TSMC) makes chips for companies such as Nvidia, which have been driving the business world’s rapid move into artificial intelligence technology. The promise of huge future profits from AI has propelled Nvidia in particular to extraordinary heights over the past year. Nvidia rose another 1.2% on Wednesday, bringing its gains so far this year to 168.5%. Nvidia has once again been the most powerful driver of the S&P 500’s rise.
The hype around AI is a key reason why the U.S. stock market has risen to record highs despite slowing economic growth and tightening pressures on low-income households, as well as growing hopes that inflation will slow enough for the Federal Reserve to enact a much-needed interest rate cut later this year.
Federal Reserve Chairman Jerome Powell is due to return to Congress to testify about interest rates and will likely repeat comments he made a day earlier that he recognizes the risks of waiting too long to cut rates.
The Fed is trying to walk a tricky tightrope of keeping interest rates high long enough to slow the economy and pull inflation back to its 2% target without going too far and triggering a recession. Much of Wall Street is operating on the expectation that the Fed will start cutting its key interest rate from its highest level in more than 20 years in September. But traders have a long history of calling for rate cuts too early.
The yield on the 10-year Treasury note fell to 4.28% from 4.30% late Tuesday, down from 4.70% since April. The move since the spring has been big for the bond market and has supported stock prices.
The yield on the two-year Treasury note, which is volatile due to expectations of Fed action, edged down to 4.61 percent from Tuesday’s close of 4.62 percent.
A report due on Thursday could spark more dramatic swings in the bond and stock markets. That’s the day the U.S. government releases its latest monthly inflation numbers. Economists expect them to show that the prices U.S. consumers paid for food, airfare and everything else rose 3.1% in June from a year earlier, slightly lower than May’s 3.3% inflation rate.
Later this week also marks the unofficial start of the latest earnings reporting season, with Delta Air Lines, JPMorgan Chase and others set to announce how much profit they made in the April-June spring, and Wall Street hoping S&P 500 companies will post their first big gains in more than two years.
Among overseas stock markets, Japan’s Nikkei rose 0.6%, closing at a record high again. The AI craze has boosted Japanese tech stocks, helping the Nikkei rise 25% so far this year, outpacing the U.S. stock market. Japanese exporters are also benefiting from the weak yen against the dollar, which could boost profits.
European stock indexes rose while other Asian markets were mixed.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
