AI Sentiment Boosts Wall Street Despite Inflation Worries and Elevated Oil Prices

Wall Street's main indexes inched higher on Friday as AI optimism bolstered sentiment despite elevated oil prices and rising Treasury yields.

The Dow Jones Industrial Average rose 226.73 points, or 0.44%, to 51,576.71, while the S&P 500 gained 22.49 points, or 0.29%, to 7,726.62. The Nasdaq Composite also increased, gaining 109.38 points, or 0.41%, to 27,048.75.

The surge was largely driven by AI-related optimism, with Microsoft shares rising 3% after the software giant unveiled several new capabilities in its Copilot app. Chip makers Micron and Marvell Technology also gained around 1% each.

However, inflation worries remained a concern due to prolonged Iran and Ukraine conflicts and soaring government debt. Brent crude prices hovered over $100 a barrel, and the yield on the 10-year Treasury note was at 5.1%. The Federal Reserve's decision to increase interest rates by at least 25 basis points in October now has a 64% chance.

Akamai Technologies surged 8% after an $11.6 billion cloud services deal with AI leader Anthropic, while People jumped 8% after a report said MGM Resorts International was discussing a bid for the online services company.