NEW YORK (AP) โ U.S. stocks are nearing record highs on Friday as Wall Street heads toward the end of another winning week.
The S&P 500 was basically flat in afternoon trading and on track for a fourth consecutive week of gains. The Dow Jones Industrial Average rose 36 points, or 0.1%, a day after briefly surpassing the 40,000 level for the first time. The Nasdaq Composite was virtually unchanged at 12:11 p.m. ET.
Despite the placid movements of the indices, feverish action was brewing underneath. Reddit jumped 12.7% after announcing a partnership in which OpenAI will bring the social media company's content to ChatGPT and become an advertising partner, among other things. The Wall Street frenzy around artificial intelligence technology has continued to rise despite some warnings about a possible bubble.
On the losing side was GameStop, which gave back more of its huge gains made at the start of the week.
GameStop fell 26.4% after saying it expected to report a loss of between $27 million and $37 million for the three months to May 4. It also said it could sell up to 45 million shares to raise cash.
Such moves may dilute current shareholders' holdings, and follow a similar move by AMC Entertainment. After its share price was also caught on a dizzying ride, the movie theater chain said earlier this week it would issue nearly 23.3 million shares to eliminate some debt. Much of the violent action between her and GameStop was more a result of enthusiasm among investors than any announcement that changed the companies' earnings outlook.
Not all of them were necessarily investors with smaller pockets. Renaissance Technologies, the hedge fund founded by pioneering investor Jim Simons, bought shares of GameStop and AMC Entertainment before the end of the first quarter, which ended March 31.
Elsewhere in financial markets, Treasury yields remained relatively stable and stock indices around the world were mixed.
This week has been good for markets overall after a report revived hopes that inflation is finally heading back in the right direction after a discouraging start to the year. That, in turn, has revived hopes that the Federal Reserve will cut its main interest rate at least once this year.
The federal funds rate is at its highest level in more than two decades, and a cut would raise investment prices and remove some of the downward pressure on the economy.
The hope is that the Fed can pull off the balancing act of slowing the economy enough through high interest rates to stamp out high inflation, but not so much that it causes a bad recession.
Of course, now that many traders are betting that the Federal Reserve will cut rates twice this year or more, some economists warn that the optimism may be going too far. It's something that happens often on Wall Street.
While recent data reports have been better than expected, "better than expected does not mean good," Bank of America economists wrote in a BofA Global Research report.
Inflation remains higher than the Fed would like, and Bank of America's Michael Gapen still expects the Fed to hold its key interest rate steady until it cuts it in December.
In the bond market, the 10-year Treasury yield rose to 4.41% from 4.38% late Thursday. The two-year yield, which more closely tracks the Federal Reserve's expectations, rose to 4.81% from 4.80%.
In overseas stock markets, indices rose 1% in Shanghai and 0.9% in Hong Kong after China's central bank announced measures to boost its struggling property market. He reduced the down payments required for mortgage loans and cut interest rates for first and second home purchases, among other measures.
Indices fell in Seoul, Tokyo and across much of Europe.
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AP Business writers Matt Ott and Elaine Kurtenbach contributed.
