NEW YORK — Another veer up the roller coaster for artificial-intelligence stocks is pulling the U.S. market higher on Thursday.
The S&P 500 rose 0.6 per cent to trim its loss for the week. The Dow Jones Industrial Average was up 307 points, or 0.6 per cent, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.6 per cent higher.
Micron Technology helped lead the market after jumping 19.4 per cent. The maker of memory chips for computers reported much stronger profit and revenue for the latest quarter than analysts expected, and it gave a stronger growth forecast for the current quarter than Wall Street expected.
That helped allay worries a bit that its stock had grown too expensive after coming into the day with a surge of 267 per cent so far this year.
Micron and AI stocks broadly have been under pressure recently because of worries that their profits can’t possibly keep pace with the tremendous rallies for their stock prices. But beyond Micron, Qualcomm said late Thursday that the acceleration of the AI era is forcing it to upgrade forecasts for its own growth in upcoming years.
The chip company said it expects its revenue outside of handsets, including data centers, to hit US$40 billion in its fiscal year of 2029, roughly double its prior target. Qualcomm’s stock rose 9.7 per cent.
The broad U.S. stock market also got a lift from easing Treasury yields in the bond market. They regressed after oil prices dipped and reports showed inflation is behaving pretty much as economists expected.
The price for a barrel of Brent crude oil, the international standard, slipped 0.2 per cent to $73.70 and is near its roughly $72 price from just before the war with Iran. It’s come well off its highs above $100 caused by the closure of the Strait of Hormuz because of the war, which slowed the global flow of oil.
That jump in oil prices earlier this year sent inflation sharply higher, and a report showed that a measure of inflation hitting U.S. consumers accelerated to 4.1 per cent last month from 3.8 per cent in April. But that wasn’t any worse than economists expected, and the hope is that inflation may ease because of the drop-off in oil prices.
That helped the yield on the 10-year Treasury slip to 4.38 per cent from 4.41 per cent late Wednesday and from 4.56 per cent earlier this month.
High yields in bond markets worldwide caused by worries about inflation are threatening to slow economies, and they have already sent rates higher for mortgages and other kinds of loans. High yields also hurt prices for investments, particularly those seen as the most expensive. That raises the pressure on AI winners.
In stock markets abroad, South Korea’s Kospi jumped 5.4 per cent after its own AI winners shot higher, including a 13.1 per cent surge for SK Hynix.
Other markets also rallied, including gains of 4.6 per cent for Japan’s Nikkei 225 and 0.8 per cent for the United Kingdom’s FTSE 100. A 1.4 per cent drop for Hong Kong’s Hang Seng was an outlier.
___
AP Business Writer Elaine Kurtenbach contributed to this report.
By Stan Choe
