AI stocks push Wall Street higher; Google’s new Gemini offerings, ASX set to rise
Stan Choe
More gains for computer chip makers and other winners of the AI boom are pushing Wall Street higher.
The S&P 500 rose 0.9 percent. The Dow Jones Industrial Average was up 361 points, or 0.7 percent, in afternoon trading, while the Nasdaq composite was 1.4 percent higher.
The Australian share market is poised to rise, with futures pointing to a gain of 16 points, or 0.2 per cent, at the open at 4.53pm AEST. The ASX closed flat on Tuesday. The Australian dollar was trading at 70.05¢.
AI stocks were once again at the center of the action on Wall Street, rising for the second straight day after falling the previous week.
After soaring on a boom in investment in AI chips and data centres, they have come under pressure in recent weeks over concerns they are investing too much. Concerns are also growing that investment in artificial intelligence may decline if artificial intelligence does not provide as much profit and productivity as hoped.
Micron Technology rose 12.7 percent, extending its 1.9 percent gain from the previous day after a 13.3 percent decline from last week. Nvidia became the two strongest forces lifting the S&P 500, with a 1.5 percent increase.
The gains came despite a further rise in oil prices, with Brent crude rising above $90 a barrel due to ongoing attacks between the US and Iran. It rose 2 percent to $91.01, briefly approaching $92 for the first time in more than five weeks. This is up from below $72 earlier this month; This is approximately the same level as before the war with Iran.
Rising oil prices threaten to accelerate inflation again, just as price increases are slowing more than economists expected. That could prompt the Fed and other central banks to raise interest rates to control inflation, which could slow economies and lower the prices of stocks and other investments.
The yield on the 10-year Treasury note rose to 4.63 percent at the end of Monday, from 4.60 percent and 3.97 percent before the war with Iran began.
On Wall Street, stronger-than-expected earnings reports from major U.S. companies helped stocks strengthen despite mounting pressure.
3M rose 6.9 percent in the latest quarter after beating analysts’ expectations for both profit and revenue. It also raised its profit forecast for full-year 2026.
Hasbro gained 7.9 percent after the toymaker said revenue from its Magic: The Gathering game surpassed $500 million in the first quarter. It also raised its revenue forecast for this year.
General Motors rose 4.8 percent after the automaker’s last-quarter profits and revenue beat analysts’ expectations and CEO Mary Barra said demand in North America remained strong.
These helped offset Danaher’s 11.4 percent decline, even though it beat analysts’ profit and revenue expectations. Analysts noted that the forecast for the key measure of income growth for the summer was weaker than Wall Street had expected.
Alphabet lost 0.9 percent after Google released three cheaper versions of its Gemini AI model, but did not provide any timing updates for its flagship Pro model, whose launch was delayed by several weeks.
The new model range includes the Gemini 3.6 Flash and Gemini 3.5 Flash-Lite, updated versions of its lightweight offerings designed for use scenarios that do not require cutting-edge technology. Google also introduced Gemini 3.5 Flash Cyber, a new lightweight version designed for cybersecurity applications.
Homebuilding company DR Horton fell 0.8 percent in the latest quarter, despite profit and revenue expectations being high. Chief Executive David Auld said the effects of affordability concerns in the housing market and wariness among potential home buyers were still being felt.
Mortgage rates have already risen to their highest level in almost a year due to higher Treasury yields in the bond market. This could force DR Horton to offer more incentives to homebuyers this quarter, which could cut into its profits.
Companies are generally under pressure to deliver strong growth in profits and revenues due to very high stock prices. Despite the recent tremors in AI stocks, the indexes are near records.
As for foreign stock markets, indices in Europe rose moderately. In the UK, the FTSE 100 Index rose 0.6 percent as new Prime Minister Andy Burnham hosted his first Cabinet meeting.
In Asia, stocks fluctuated more. South Korea’s Kospi jumped 3.6 percent on strong gains in two dominant stocks. Both Samsung Electronics and SK Hynix have benefited greatly from the AI boom, with the Kospi up 60 percent so far this year despite a 20 percent drop in July.
The Tokyo Nikkei 225 index rose 3.3 percent after returning from holiday on Monday, while indexes rose 1.8 percent in Shanghai and fell less than 0.1 percent in Hong Kong.
