Wall Street Nears Record Highs on Strong AI Earnings and Cooling US Inflation

AI stock surges and a slight drop in inflation push major indexes higher while housing stocks dip amid lingering economic pressures.

Wall Street finished just shy of a record Wednesday after several AI stocks reported better growth for the spring than analysts expected while a report showed inflation across the United States was slightly less bad last month.

The S&P 500 rose 0.3% for its first gain since setting its all-time high on Friday. The Dow Jones Industrial Average dipped 21 points or less than 0.1% and the Nasdaq composite climbed 0.5%.

AI technology business stocks helped lead the way after strong profit reports bolstered hopes they can continue to deliver big-enough growth to justify the huge gains their prices have made. Super Micro Computer jumped 19% after reporting earnings per share for the latest quarter that were 84% higher than analysts expected. It also gave forecasts for upcoming profit and revenue that topped analysts? expectations. CoreWeave leaped 19.3% after reporting better revenue for the latest quarter than analysts expected, along with a milder loss. CEO Michael Intrator said demand is accelerating from customers as big businesses adopt AI. It gives its customers access to AI chips from Nvidia and Nvidia climbed 3%. It was the single strongest force lifting the S&P 500.

D.R. Horton fell 3.3% and PulteGroup lost 2.5%. Builders FirstSource which sells countertops and other building materials dropped 3.6%.

In stock markets abroad, indexes dipped in Europe following a mixed showing in Asia. South Korea?s Kospi jumped 3.7% for one of the world?s bigger gains. It?s been at the center of the jarring swings for AI stocks because it?s dominated by two tech giants, Samsung Electronics and SK Hynix.

Treasury yields fell after a report showed that U.S. consumers paid prices for gasoline, groceries and other costs of living last month that were 3.4% higher than a year earlier. That?s higher than anyone would like but it?s not as bad as June?s 3.5% inflation rate. Higher yields have already pulled long-term mortgage rates to their highest levels in a year hurting the housing industry and losses for homebuilders on Wednesday helped keep the market in check.

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