NEW YORK (AP) — U.S. stocks were mostly higher Wednesday, putting Wall Street on track for more records.
The S&P 500 was up 0.4% in midday trading, on track to hit its 37th all-time high this year. The Dow Jones Industrial Average was up 93 points, or 0.2%, as of 11:45 a.m. Eastern time, and the Nasdaq Composite was 0.5% 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 2.9% 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 2.3% on Wednesday, bringing its gains so far this year to 171.5%. 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 returned to Congress to testify about interest rates, repeating many of his comments from the previous day, saying he was “not sending any signal” about when interest rates would be lowered but acknowledged the risk that it would be too late.
Powell said he was “considering both sides” of the risk of waiting too long or too late to cut the Fed’s key interest rate from its highest level in more than two decades, where it has remained for nearly a year. Cutting rates too soon could send inflation reviving, while waiting too long could tip the economic slowdown into a recession.
Much of Wall Street expects the Fed to start cutting its key interest rate in September, but traders have long made premature predictions. Powell echoed recent reports that showed inflation improving after a sluggish start to the year but reiterated that the Fed isn’t confident inflation will sustainably fall toward its 2% target.
“As we get more and better data, our confidence will increase,” paving the way for rate cuts, Powell said.
The yield on the 10-year Treasury note fell slightly to 4.29% from 4.30% at Tuesday’s close and 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 fluctuates widely depending on expectations of Fed action, was flat at 4.62 percent, the same as Tuesday’s close.
The report, due out Thursday, could trigger sharp swings in bond and stock markets. That’s the same day the U.S. government releases its latest monthly inflation figures. 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.
Smart Global Holdings, a technology company with businesses in computing, memory and LED, reported profit and revenue for the latest quarter that beat analyst expectations, sending its shares up 16.6%.
Leading the declines on Wall Street was RegalZoom, down 26.2% after the company announced that CEO Dan Warnikov would be leaving the company and stepping down from the board. The company also lowered its full-year revenue forecast.
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.
AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
