US Stock Market Moves Higher

On Thursday, US stock indexes advanced, led by companies reporting stronger-than-expected profits, bringing them closer to record highs. The gains came even as stocks tied to the artificial intelligence (AI) industry continued to swing amid uncertainty over the sustainability of the sector's recent boom.

Leading Indexes Post Gains

The S&P 500 rose 0.3% after recovering from an early loss, closing in on its all-time high set last week. The Dow Jones Industrial Average jumped by 556 points, or 1.1%, while the Nasdaq composite added 0.1%.

Corporate Profits Drive Momentum

Several companies posted better-than-expected earnings, fueling optimism among investors. Marsh & McLennan, which recently updated its brand to Marsh, saw its shares rally by 4.6% after reporting a strong profit for the summer. Kimberly-Clark climbed 4.7% on the back of projections for higher-than-expected quarterly revenue and profit. Bank of New York Mellon rose 3.2% after also surpassing analyst profit expectations and noting regional strength, according to CEO Robin Vince.

Swings in AI and Tech Stocks

Markets experienced volatility earlier in the day, particularly in AI stocks. A sell-off that began Wednesday spread internationally, causing significant drops in South Korea’s Kospi index—down 7.6%—and Japan’s Nikkei 225—down 4.9%—before affecting the S&P 500 at the start of Thursday trading.

Nvidia, which has benefited significantly from the AI surge, fell 1.8% and weighed heavily on the S&P 500, despite reducing an earlier loss. Taiwan Semiconductor Manufacturing Co.'s US-listed shares were down as much as 5.3% in the morning before finishing with a 1.8% loss, despite reporting quarterly profits above analyst expectations. CoreWeave, a cloud AI computing provider, rebounded from a morning drop to end the day up 5.9%.

Bond Yields and Market Volatility

In the bond market, Treasury yields fell, with the 10-year Treasury yield dropping to 5.09% from 5.19% the previous day. This movement indicated increased investor demand for safer assets, even as another report showed US inflation worsening more than economists had expected.

Strong economic reports were released, with US retailers exceeding sales forecasts in the previous month and fewer workers applying for unemployment benefits, which usually supports higher yields for bonds.

International Markets

Outside the US, South Korea suffered the biggest losses, driven by declines in major chip companies Samsung Electronics and SK Hynix. The country's Kospi index experienced its worst day since July, falling 39% from its June peak. In contrast, European markets posted gains, with London’s FTSE 100 up 1.1%, reflecting less dependence on tech stocks.

Conclusion

Despite the ongoing volatility in AI and tech stocks, the US stock market continued to push higher, supported by solid corporate profits and strong economic indicators. Key indexes, including the S&P 500, Dow Jones, and Nasdaq, remain close to record highs, even as market participants monitor swings in leading AI stocks and changes in bond yields.

Source: whdh.com.