NEW YORK — Stocks rose on Wall Street on Tuesday as computer chip makers and other winners of the artificial intelligence boom posted higher profits.
The S&P 500 rose 0.9%. The Dow Jones Industrial Average rose 385 points, or 0.7%, and the Nasdaq Composite Index rose 1.3%.
AI stocks were once again at the center of the market, rising for the second straight day after falling last week.
Stocks have soared on a boom in investment in AI chips and data centers, but have come under pressure in recent weeks over concerns that the investments are too expensive. Concerns that investment in AI will decline if AI does not produce the expected benefits and productivity also weigh heavily.
Micron Technology rose 12.2%, recovering from a 13.3% decline from the previous week and adding 1.9% from the previous day. Nvidia added 2%, making it the two most powerful forces pushing the S&P 500 higher.
The gains came despite further increases in oil prices, with continued attacks between the US and Iran pushing Brent crude at one point to near US$92 per barrel for the first time in more than five weeks. After that, the increase was limited to 2%, and the price settled at 91.01 USD. That’s up from less than $72 earlier this month and about the same level as before the war with Iran.
Rising oil prices threaten to reaccelerate inflation as prices rise more slowly than economists expected. As a result, the Federal Reserve and other central banks may be forced to raise interest rates, slowing the economy and causing the prices of stocks and other investments to fall.
The yield on the 10-year U.S. Treasury rose to 4.63% from 4.60% late Monday, up from just 3.97% before the war with Iran began.
On Wall Street, stocks rose despite further pressure after several major U.S. companies reported better-than-expected profit reports.
3M rose 7.3% in its latest quarter as its profit and sales beat analysts’ expectations. The company also raised its full-year profit forecast for 2026.
Hasbro rose 8.8% after the company announced quarterly sales of its Magic: The Gathering games topped $500 million for the first time. It also raised its earnings forecast for this year.
General Motors rose 4.9% after the automaker’s latest quarter of profits and sales beat analysts’ expectations and Chief Executive Officer Mary Barra said demand remained strong in North America.
These helped offset Danaher’s decline of 11%, even though the company’s earnings and sales also beat analyst expectations. Analysts noted that their forecast for the fundamental measure of summer sales growth was weaker than Wall Street expected.
Homebuilder DR Houghton fell 0.9% even though its latest quarter’s profit and sales beat expectations. Executive chairman David Old said the company was still feeling the effects of affordability concerns in the housing market and wariness among potential homebuyers.
Mortgage interest rates have already risen to their highest level in nearly a year as U.S. Treasury yields rise in the bond market. This may force DR Horton to offer more incentives to homebuyers this quarter, reducing profits.
Rising stock prices have put companies under widespread pressure to deliver strong profit and sales growth. Despite the recent volatility in AI stocks, the index remains near all-time highs.
Overall, the S&P 500 rose 65.92 points to 7,509.20. The Dow Jones Industrial Average rose $385.38 to $52,224.64, and the Nasdaq Composite Index rose $329.13 to $25,837.21.
In overseas stock markets, European indexes rose slightly. Britain’s FTSE 100 index rose 0.6% after new Prime Minister Andy Burnham hosted his first Cabinet meeting.
In Asia, stock price movements were even more dramatic. South Korea’s Kospi rose 3.6% as two major stocks rose sharply. Samsung Electronics and SK Hynix have both benefited greatly from the AI boom, with Kospi soaring 60% so far this year despite falling 20% through July.
Tokyo’s Nikkei Stock Average rose 3.3% after returning from the holiday on Monday, while in Shanghai the index rose 1.8% and in Hong Kong it fell less than 0.1%.
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Stan Cho, Associated Press
AP Business Writers Chan Ho-him and Matt Ott contributed to this report.
