NEW YORK (AP) — U.S. stocks are drifting in mixed trading on Wednesday.
The S&P 500 rose 0.2% in afternoon trading and remains near its all-time high set a couple weeks ago. The Dow Jones Industrial Average jumped 428 points, or 0.9%, after setting its own record the day before, while the Nasdaq composite was down 0.3%, as of 12:42 p.m. Eastern time.
Advanced Micro Devices was at the front of the market. It rallied 8.6% after CEO Lisa Su said the chip company is expecting better than 35% of annual compounded growth in revenue over the next three to five years. She credited “accelerating AI momentum.”
Stocks benefiting from the artificial-intelligence frenzy have been shaky recently, as investors question whether they can add more to their already spectacular gains. Their sensational growth has been one of the top reasons the U.S. market has hit records despite a slowing job market and high inflation. But their prices have shot so high that critics say they’re reminiscent of the 2000 dot-com bubble, which ultimately burst and dragged the S&P 500 down by nearly half.
Nvidia, for example, came into the day with a 4.6% drop for the month so far after its stock price more than doubled in four of the last five years. The biggest player in AI chips swung between gains and losses on Wednesday and at one point was the one of the heaviest weights on the market.
Similar questions are also dogging the broad U.S. stock market, though other stocks aren’t getting as much criticism as Big Tech and AI superstars.
One way for stock prices to look less expensive is for companies to deliver big growth in profits.
IBM rose 1.2% after announcing progress in “bringing truly useful quantum computing to the world,” according to Jay Gambetta, director of IBM Research. Companies across the industry are racing to develop quantum computing in order to solve complex problems beyond the reach of classical computers.
On Holdings jumped 19.3% after the Swiss shoe and apparel company reported a much bigger profit for the latest quarter than analysts expected.
But even beating expectations may not be enough for some stocks. Circle Internet Group fell 10.7% even though it reported profit for the latest quarter that trounced analysts’ estimates.
The stock price of the issuer of one of the most popular cryptocurrencies has been generally falling since it got near $300 in June, just a few weeks after its initial price offering of $31. It’s now below $90.
Another way for stock prices to look less expensive is if interest rates fall. That’s because bonds paying lower yields can encourage investors to pay higher prices for other investments.
In the U.S. bond market, the yield on the 10-year Treasury eased to 4.06% from 4.13% late Monday after trading resumed following Tuesday’s Veterans Day holiday.
Traders still see a nearly two-in-three chance that the Federal Reserve will cut its main interest rate at its next meeting in December, according to data from CME Group. That’s despite Fed Chair Jerome Powell saying a third cut for the year is far from a sure thing. Fed officials are worried about the potential of giving still-high inflation more fuel.
The Fed has been in a difficult spot recently because the U.S. government has not been publishing its usual updates on the job market, inflation and other areas of the economy. That’s restricted its view of how things are going, though the nation’s longest-ever shutdown appears to be nearing an end.
In stock markets abroad, indexes rose across much of Europe and Asia.
Germany’s DAX jumped 1.2%, and South Korea’s Kospi gained 1.1% for two of the world’s bigger gains.
___
AP Business Writers Yuri Kageyama and Matt Ott contributed.
