AI Stocks Rebound Amid Easing Inflation Concerns

The US stock market closed just shy of its all-time high on Wednesday after several AI stocks reported better-than-expected growth for the spring. The S&P 500 rose 0.3%, marking its first gain since setting a record last Friday. Meanwhile, inflation data showed that prices across the United States were slightly less bad last month, with a 3.4% increase in costs of living compared to a year ago.

The AI technology sector led the way, with stocks like Super Micro Computer and CoreWeave jumping 19% after reporting strong profit reports. These gains bolstered hopes that these companies can continue to deliver big-enough growth to justify their high prices. Nvidia, which supplies AI chips to CoreWeave, climbed 3%, becoming the strongest force lifting the S&P 500.

The easing of yields in the bond market also provided support for Wall Street. Treasury yields fell after a report showed that US consumers paid higher prices for gasoline, groceries, and other costs of living last month. This deceleration could give the Federal Reserve more leeway to hold off on interest rate hikes.