Wall Street gets AI boost, ASX set to rise
Stan Choe
Updated ,first published
The US stock market hits more records as the winners of the AI boom continue to soar.
The S&P 500 rose 0.1 percent after drifting between small gains and losses for the day. The Dow Jones Industrial Average rose 228 points, or 0.4 percent, and the Nasdaq composite gained less than 0.1 percent. All three set new all-time highs.
The Australian share market is poised to rise with futures at 6.27am (AEST) pointing to a gain of 25 points, or 0.3 per cent, at the open. The ASX fell on Tuesday. The Australian dollar was trading at 71.81¢.
Hewlett Packard Enterprise has helped lead Wall Street, with its shares rising 19.5 percent after reporting a profit that beat analysts’ expectations in the latest quarter. He credited demand from customers developing AI capabilities.
Marvell Technology jumped 32.5 percent, its best day since its shares began trading in 2000, after Nvidia CEO Jensen Huang suggested at a conference in Taiwan that Marvell could be “the next trillion-dollar company.” The latest company to enter the growing club of giants is Micron Technology, which is also riding the artificial intelligence wave. Nvidia’s total value, which lost 0.7 percent, exceeded $5 trillion ($7 trillion).
Generac rose 5.7 percent after it said it signed a deal to provide backup power generators to an unnamed “leading hyperscale data center operator.”
Such “hyperscalers” are spending enormous amounts of money building massive AI data centers that power what proponents believe is the next big revolution for the global economy.
Alphabet is one of these hyperscalers, and Google’s parent company said it raised $80 billion in cash to help cover its investments by selling its shares. It plans to spend as much as $190 billion on equipment and other investments this year.
That’s more than the value of The Walt Disney Co.’s entire stock, and Alphabet predicts its capex will “increase significantly” next year.
Such large sums raise the question of whether AI can deliver the profits and productivity needed to make the entire investment worth it. Critics were already talking about the possibility of a bubble in AI investment, and Alphabet’s shares fell 3.9 percent. It was one of the S&P 500’s top heavyweights.
Overall, the S&P 500 rose 9.82 points to 7,609.78. The Dow Jones Industrial Average rose 228.91 to 51,307.79, and the Nasdaq composite index rose 7.09 to 27,093.90.
Analysts say U.S. stocks may be poised to slow after a nine-week straight winning streak, the S&P 500’s longest winning streak since 2023. This rise was largely driven by strong profit reports from US companies, as well as hopes that the US and Iran would reach an agreement on reopening the Strait of Hormuz. This will allow oil to flow freely from the Persian Gulf again and hopefully its price will drop.
In the oil market, prices rose again to claw back even more of last week’s decline. Brent crude, the international standard, rose 1.1 percent to settle at $96.00 a barrel, still well above its pre-war level of roughly $70 a barrel.
In the bond market, Treasury yields have remained relatively stable.
The yield on the 10-year Treasury note fell to 4.45 percent from 4.47 percent on Monday. It jumped briefly following a report that said U.S. employers posted far more jobs in late April than economists expected; This is a potential signal of the continued health of the U.S. labor market. But it quickly flashed back to just before the report was released.
Recent high yields around the world have threatened to slow economies and drive down the prices of stocks and every other investment. They have already pushed the average long-term US mortgage rate to its most expensive level in nine months and could restrict companies from borrowing to build the AI data centers that have recently fueled growth of the US economy.
Indices on stock markets abroad rose in most of Europe and Asia.
Hong Kong’s Hang Seng rose 2.5 percent, one of the biggest moves in the world.
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