Wall Street Wednesday: Big Tech Rebounds
NEW YORK (AP) -- Big technology stocks are bouncing back and boosting U.S. indexes on Wall Street Wednesday, just one of the day's many sharp swings for financial markets around the world.
The S&P 500 was up 1.2% in early trading. The Dow Jones Industrial Average was up 55 points, or 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1.8% higher.
Oil prices jumped nearly 3% in the commodities market after the death of Hamas' political leader raised worries about a potential escalation of violence in the Middle East, while the Japanese yen strengthened against the U.S. dollar after the Bank of Japan raised its benchmark interest rate.
In the U.S. bond market, Treasury yields were easing by a bit ahead of a decision on rates by the Federal Reserve coming in the afternoon. A batch of economic reports released during the morning suggested the Fed may indeed cut interest rates at its next meeting in September.
On Wall Street, Advanced Micro Devices rallied 7.5% after reporting better profit and revenue for the latest quarter than analysts expected, thanks in part to accelerating artificial-intelligence business. That helped drive Nvidia, the chip company that's become the poster child for Wall Street's frenzy around AI, up 7.8% a day after it lost 7%.
What such Big Tech stocks do matters a lot because they're Wall Street's most valuable companies, and that gives them the biggest sway on the S&P 500. A handful of these stocks, known as the "Magnificent Seven," drove the U.S. stock market to dozens of records this year, in part on the furor around AI. But they ran out of momentum this month amid criticism they had grown too expensive and expectations had run too high.
Such criticism hasn't gone away, and Microsoft fell 1.4% despite reporting profit and revenue for the latest quarter late Tuesday that edged past analysts' expectations. Growth in its Azure cloud-computing business fell a bit shy of analysts' high bar for expectations.
That followed profit reports from Tesla and Alphabet last week that investors found underwhelming, which raised concerns that other "Magnificent Seven" stocks could also fail to impress. Amazon, Apple and Meta Platforms will report their latest profit results in coming days.
Stronger-than-expected profit reports from companies outside the Magnificent Seven were also helping to support the market on Wednesday.
DuPont rose 3.9% after delivering better profit and revenue than expected, thanks in part to a recovery for the electronics business, and the chemical giant raised its financial forecasts for the full year.
Match Group jumped 9.1% after saying its user trends for Tinder are stabilizing and reporting results for the latest quarter that roughly matched analysts' expectations.
They helped offset a 5.3% drop for Altria Group after the maker of cigarettes and smoke-free products fell short of expectations for profit and revenue in its latest quarter.
In the bond market, the yield on the 10-year Treasury slipped to 4.10% from 4.14% late Tuesday and from 4.70% in April. It's been falling as a slowdown in inflation raises expectations for coming cuts to interest rates by the Federal Reserve.
Virtually no one expects it to announce a cut later in the afternoon, following its latest policy meeting. But the widespread expectation is for it to begin cutting its main interest rate from a two-decade high at its next meeting in September.
A couple reports on the U.S. economy that came in softer than expected helped to cement those expectations. One showed U.S. employers spent less in total pay and benefits for workers during the spring than economists expected. Another suggested hiring by employers outside the government was a touch weaker than expected.
While such data isn't great news for workers, it could be the type of "Goldilocks" data that Wall Street is looking for: not so strong that it pushes upward on inflation but not so weak that it raises worries about a recession.
In the oil market, a barrel of benchmark U.S. crude rose 2.9% to $76.93.
Hamas's top political leader Ismail Haniyeh died in a predawn airstrike in the Iranian capital early Wednesday, Iran and the militant group said, blaming Israel for a shock assassination that could escalate conflict in the region and potential disrupt the flow of oil.
There was no immediate comment from Israel, which has pledged to kill Haniyeh and other Hamas leaders over the group's Oct. 7 attack on southern Israel in which the Palestinian militant group killed 1,200 people and took some 250 others hostage.
Brent crude, the international standard, rose 2.7% to $80.21.
In stock markets abroad, Japan's Nikkei 225 rose 1.5% after Bank of Japan raised its benchmark rate to about 0.25% from a range of zero to 0.1%.
Indexes rallied 2.1% in Shanghai and 2% in Hong Kong after official data showed China's July manufacturing activity contracted for a third straight month, fueling expectations that Beijing will need to roll out more stimulus to counter a slowdown for the world's second-largest economy.
Stock indexes also rose across Europe.