Wall Street hangs around its records as the AI boom keeps growing

The U.S. stock market set new records on Tuesday, with the S&P 500, Dow Jones Industrial Average, and Nasdaq composite all hitting all-time highs. The S&P 500 rose 0.1% to 7,609.78, the Dow gained 228 points to 51,307.79, and the Nasdaq edged up by less than 0.1% to 27,093.90. AI-driven companies led gains, including Hewlett Packard Enterprise, which surged 19.5% after reporting quarterly profits exceeding expectations, attributing growth to AI demand. Marvell Technology jumped 32.5%, its best single-day performance since its 2000 IPO, after Nvidia CEO Jensen Huang suggested it could become the 'next trillion-dollar company.' Nvidia itself slipped 0.7% but remains valued over $5 trillion. Generac climbed 5.7% following a deal to supply backup power generators to a 'leading hyperscale data center operator,' highlighting massive AI infrastructure spending. Alphabet announced plans to raise $80 billion in cash and invest up to $190 billion this year, including $190 billion in equipment and other AI-related expenditures. The company warned its spending would 'significantly increase' next year, raising concerns about AI investment sustainability. Alphabet’s stock fell 3.9%, dragging down the S&P 500. Analysts predict a potential market slowdown after nine consecutive winning weeks for the S&P 500, its longest streak since 2023. The rally has been fueled by strong corporate earnings and hopes for a U.S.-Iran deal to reopen the Strait of Hormuz, easing oil price pressures. Brent crude oil rose 1.1% to $96.00 per barrel, recovering from last week’s decline. In the bond market, the 10-year Treasury yield dipped slightly to 4.45% after a report showed unexpected job openings growth in late April, though yields quickly reverted to prior levels. High global yields continue to pose risks to economic growth, despite the stock market’s resilience.