NEW YORK (AP) โ The S&P 500 and Nasdaq composite indexes are climbing toward all-time highs Wednesday as technology stocks continue to rise.
The S&P 500 rose 0.5% in midday trading and was just below its record set two weeks ago. The Nasdaq composite was up 1.1% as of 11 a.m. ET and was on track to set an all-time high. The Dow Jones Industrial Average lagged the market and was down 63 points, or 0.2%.
Some better-than-expected earnings reports from technology companies helped lift the market. Hewlett Packard Enterprise jumped 12.4% after saying strong sales related to artificial intelligence systems helped it deliver better results than expected. It also raised its financial forecasts for the year.
A frenzy on Wall Street around AI has catapulted stocks, almost regardless of what the broader economy and interest rates are doing. Nvidia rose another 3% to bring its year-to-date profit to 142.1%. It has become the poster child for the AI โโcraze because its chips are driving much of the development, and Nvidia was again the strongest force driving the S&P 500 by far. Nvidia's total market value is around $3 trillion.
Other big tech stocks also boosted the market, including a 3.5% rise for Broadcom and a 0.8% rise for Microsoft. Cybersecurity company CrowdStrike rose 5.9% after posting better-than-expected earnings and revenue in the latest quarter.
They helped offset a 4.6% decline for Dollar Tree, which met analyst expectations for earnings but barely missed revenue. The retailer also said he is considering selling or spinning off his Family Dollar business.
The broader retail industry has been highlighting the challenges for low-income American households, which are trying to keep up with still-high inflation.
Treasury yields remained relatively stable in the bond market following some mixed data on the economy. A report said real estate, health care and other businesses in the U.S. service sector returned to growth last month, beating economists' forecasts. Perhaps most importantly for Wall Street, the Institute for Supply Management report also said prices rose at a slower pace in May than a month earlier.
Another report in the morning suggested that hiring slowed last month more than expected at U.S. employers outside the government.
In general, stocks have been shaky recently after reports suggested growth in the U.S. economy is fading under the weight of high interest rates. In fact, Wall Street has been waiting for such a slowdown because it may reduce inflation and convince the Federal Reserve to deliver long-awaited interest rate cuts. But it also raises the possibility of overshooting and sending the economy into a recession, ultimately hurting stock prices.
Treasury yields have plunged sharply after weaker-than-expected economic reports raised expectations of upcoming rate cuts by the Federal Reserve.
The 10-year Treasury yield fell further to 4.31% from 4.33% on Tuesday. It is well below the 4.60% it reached a week ago.
The next big move for Treasury yields and Wall Street in general could come as early as Friday, when the U.S. government releases its monthly jobs report. That report is much more comprehensive than Wednesday's ADP report, which focuses only on the private sector, and economists expect Friday's data to show a slight rebound in overall hiring. The hope remains that the labor market will slow its growth, but not so much that it turns into widespread layoffs.
The worst-case scenario for markets would likely be if data on the labor market and the rest of the economy were stronger than expected, according to JJ Kinahan, chief executive of IG North America. That could lead the Federal Reserve to consider raising its key interest rate even further, which would put more pressure on the economy and investment prices. The federal funds rate has remained at its highest level in more than two decades.
But Kinahan says he sees this scenario as less likely than others.
In foreign stock markets, indices rose in much of Europe. Investors expect the European Central Bank to cut interest rates at its meeting on Thursday amid concerns about a sluggish economy.
Stocks fell across much of Asia, with indexes down 0.9% in Tokyo and 0.8% but up 1% in Seoul.
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AP Business writers Yuri Kageyama and Matt Ott contributed.
