NEW YORK (AP) — U.S. stock indexes are mixed Thursday as technology stocks buoyed by another blowout earnings report from Nvidia work against weakness elsewhere in the market. In the latest example of how good news for the economy isn't necessarily good for Wall Street, a report suggesting accelerating growth for U.S. business activity raised worries about interest rates staying high.
The S&P 500 was up 0.1% in morning trading. The rallies for tech stocks had the Nasdaq composite 0.5% higher, as of 10 a.m. The Dow Jones Industrial Average, which has less of an emphasis on tech, was lagging the market and down 216 points, or 0.5%.
Nvidia soared 8.7% after it delivered its latest knockout profit report late on Wednesday. Its revenue surged 262% in the latest quarter from a year earlier, and its profit leaped an eye-popping 629%. The company’s chips are helping to train artificial-intelligence systems, and demand for them has been voracious.
Nvidia also increased its dividend as its CEO, Jensen Huang, touted how “the next industrial revolution has begun.”
Concern has grown that Wall Street’s frenzy around the potential for AI has created a bubble where prices have grown too high and expectations have become too tough. But the continued skyrocketing growth for Nvidia, which has grown into one of Wall Street’s most influential stocks, helped lift others only further.
AMD rose 1.2%, along with other chip companies. Super Micro Computer, which sells server and storage systems used in AI and other computing, jumped 5.7%.
News Corp. rose 2.2% after it announced a deal to bring its content from The Wall Street Journal, New York Post and other news businesses to OpenAI.
But the majority of stocks were falling on Wall Street as pressure rose on them from rising Treasury yields in the bond market. A couple reports suggesting the U.S. economy remains strong forced traders to rethink some bets about when the Federal Reserve can offer financial markets relief by lowering interest rates.
The Fed is trying to pull off the difficult feat of slowing the economy enough through high rates to get inflation fully under control but not so much that it forces a painful recession. It's been holding its main interest rate at the highest level in more than two decades to do so, and Wall Street is itching for some easing.
Hopes are still high for at least one cut to rates this year following some encouraging reports on inflation and portions of the economy recently. But preliminary data on Thursday suggested growth in U.S. business activity is running at its fastest level in more than two years. The report from S&P Global said growth improved for businesses in both the services and manufacturing sectors.
A separate report, meanwhile, showed the U.S. job market remains solid despite high interest rates. Fewer workers applied for unemployment benefits last week than economists expected, an indication that layoffs remain relatively low.
Treasury yields had been close to flat following the joblessness report, but they turned higher immediately after the later report on business activity.
The yield on the 10-year Treasury rose to 4.47% from 4.43% late Wednesday. The two-year yield, which more closely tracks expectations for action by the Federal Reserve, climbed to 4.92% from 4.87%.
High interest rates have made everything from credit-card payments to auto loans more expensive. Tougher mortgage rates have also hit the economy, and a report on Thursday showed sales of new homes weakened by more last month than economists expected.
Lennar, a homebuilder, fell 0.9%.
One of Wall Street's worst drops came from VF Corp., the company behind The North Face, Vans, Timberland and other brands. It fell 8% after reporting a loss for the latest quarter, along with weaker revenue than analysts expected.
In stock markets abroad indexes were mixed across Europe and Asia. Japan’s Nikkei 225 rose 1.3% in part on strength for semiconductor-related companies following Nvidia’s powerful profit report. Indexes fell 1.7% Hong Kong and 1.3% in Shanghai amid questions about whether a fresh flurry of policies to help China’s troubled property sector will suffice to end the industry’s crisis.
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AP Business Writers Yuri Kageyama and Matt Ott contributed.
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