AI Stocks Spark Wall Street Recovery Amid Rate Hike Uncertainty
Wall Street is experiencing its first gain in two days as AI stocks report better growth than expected, bolstering hopes that they can continue to deliver significant returns.
The S&P 500 added 0.4% and was on track for its first gain since setting an all-time high on Friday. The Dow Jones Industrial Average was up 13 points, or less than 0.1%, as of 2:25 p.m. Eastern time, and the Nasdaq composite was 0.7% higher.
Stocks in the artificial-intelligence technology business led the way after strong profit reports. Super Micro Computer jumped 19.6% after reporting earnings per share for the latest quarter that were 84% higher than analysts expected. CoreWeave, which offers AI computing power to customers over the cloud, leaped 19.4% after reporting better revenue for the latest quarter than analysts expected.
Nvidia climbed 3.1%, and was the single strongest force lifting the S&P 500. The easing of yields in the bond market also provided support to Wall Street. Treasury yields fell after a report showed that U.S. consumers paid prices for gasoline, groceries, and other costs of living last month that were 3.4% higher than a year earlier.
The deceleration could give the Federal Reserve more leeway to hold off on hikes to interest rates. Traders are betting on just a 40% chance of a rate hike at its next meeting in September, down from the coin flip's chance seen the day before.