The stock market hit another record on Tuesday as the winners of the artificial intelligence boom continued to rise.
The Standard & Poor’s 500 Index rose 0.1% after bouncing between modest gains and losses throughout the day. The Dow Jones Industrial Average rose 0.4%, while the Nasdaq Composite rose less than 0.1%. All three companies set new record highs.
Hewlett Packard Enterprise led the market, with its stock soaring 19.5% after reporting its latest quarterly profit that beat analysts’ expectations. Recognized demand from customers to build artificial intelligence capabilities.
Marvell Technology soared 32.5% in its best day since the stock began trading in 2000 after Nvidia CEO Jensen Huang suggested at a conference in Taiwan that Marvell could become “the next trillion-dollar company.” The last company to join the growing club of giants was Micron Technology, which is also riding the AI wave. Nvidia fell 0.7%, but its total value exceeded $5 trillion.
Generac rose 5.7% after announcing it had signed a contract to provide backup generators to an unnamed “major hyperscale data center operator.”
These “hyperscalers” are spending billions to build massive AI data centers that are driving what their proponents believe is the next great revolution in the global economy.
Alphabet is one of those hyperscalers, and Google’s parent company announced it was selling its own stock to raise $80 billion in cash to fund investments. It plans to spend up to $190 billion on capital and other investments this year.
That’s more than the value of all of Walt Disney’s stock, and Alphabet expects investment spending to increase “significantly” next year.
Such large sums of money raise questions about whether AI can generate returns and productivity worth all the investment. The possibility of a bubble in AI investing is already being talked about by critics, with Alphabet’s stock falling 3.9%. This was one of the heaviest weights in the S&P 500.
Overall, the S&P 500 rose 9.82 points to 7,609.78. The Dow Jones Industrial Average rose 228.91 points to 51,307.79, and the Nasdaq Composite Index rose 7.09 points to 27,093.90.
Analysts say the overall U.S. stock market could be headed for a slowdown after the S&P 500 index’s unbroken nine-week winning streak, its longest streak since 2023. The increase was largely due to strong profit reports from US companies and hopes that the US and Iran could reach an agreement to reopen the Strait of Hormuz. That would allow oil to flow freely again from the Persian Gulf, and hopefully lower prices.
In the oil market, prices rose again to recover from last week’s slump. Brent crude oil, the international standard, rose 1.1% to settle at $96.00 per barrel, still well above the prewar level of about $70.
In the bond market, US Treasury yields remained relatively stable.
The yield on the 10-year U.S. Treasury note fell to 4.45% from 4.47% late Monday. The index soared after reports that U.S. employers were advertising far more jobs than economists expected at the end of April, suggesting the U.S. labor market may remain healthy. However, it soon returned to the level seen just before the report was released.
Recently, high yields around the world threaten to slow down economies and drive down the prices of stocks and all other types of investments. It has already pushed average long-term mortgage rates in the U.S. to their most expensive levels in nine months, and could curb corporate borrowing to build the AI data centers that have supported the U.S. economy’s recent growth.
In overseas stock markets, indexes rose in most regions of Europe and Asia.
Hong Kong’s Hang Seng rose 2.5% in one of the world’s biggest moves.
Cho writes for The Associated Press.
