AI Stocks Surge as Inflation Rates Ease, Wall Street on Track for Record Close
Wall Street stocks are on track to close at their all-time high after AI-focused companies reported strong growth in their latest quarterly earnings. The S&P 500 index added 0.3% as of Wednesday morning, while the Dow Jones Industrial Average rose 65 points or 0.1%. Meanwhile, oil prices edged lower with Brent crude slipping 0.5% to $88.48 per barrel.
Super Micro Computer saw its shares jump 13.7% after reporting a significant increase in earnings per share for the latest quarter. CoreWeave's stock climbed 20.3% as the company reported better revenue and a milder loss than expected. The AI computing power provider cited accelerating demand from customers as big businesses adopt artificial intelligence.
The strong performance of AI stocks comes after months of volatility, with investors seeking to justify their high prices through solid profits. Treasury yields fell 0.05% to 4.65% following the release of a report showing a slight decrease in U.S. inflation rates. This eased concerns about interest rate hikes and had a positive impact on the stock market.
The deceleration in inflation could give the Federal Reserve more leeway to hold off on interest rate increases, which would help keep a lid on prices but also force a slowdown in the economy. However, traders now bet on just 36% chance of an interest rate hike at the next meeting in September, down from a coin flip's chance seen the day before.