Tech carries Wall Street to records, even as most stocks fall after discouraging inflation data

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NEW YORK (AP) — A rebound for technology stocks led Wall Street to records Wednesday, even though the majority of U.S. stocks fell following another discouraging update on inflation.

The S&P 500 rose 0.6 per cent and topped its prior all-time high set at the start of the week. The Dow Jones Industrial Average dipped 67 points, or 0.1 per cent, while the Nasdaq composite set its own record after climbing 1.2 per cent.

Gains for tech stocks led the way, like Micron Technology’s 4.8 per cent and On Semiconductor’s 11.1 per cent. They had stumbled the day before after momentum suddenly halted  for stocks riding excitement around artificial-intelligence  technology.

Nvidia, the chip company that was among the first faces of the AI boom, rose 2.3 per cent and was the strongest force pushing upward on the S&P 500 because of its immense size. Its CEO, Jensen Huang, got an invitation  to join President Donald Trump on his trip to China, where they could discuss allowing shipments of Nvidia AI chips to the world’s second-largest economy.

Earlier in the day, Japan’s SoftBank Group Corp. said that its profit  for the 12 months through March zoomed by nearly five-fold from the previous year as its AI investments paid off. China’s Alibaba Group  said its AI and cloud growth accelerated in the latest quarter, and its stock that trades in the United States rose 8.2 per cent even though its overall results fell short of analysts’ expectations.

But the majority of stocks outside of the technology industry fell, as pressure builds on Wall Street.

“Corporate earnings and AI momentum are acting as the market’s primary shock absorbers, but the road is getting significantly rougher,” said Tim Waterer, chief market analyst at KCM Trade.

A report on Wednesday showed that inflation at the U.S. wholesale level was considerably worse last month  than economists expected. That followed a report on Tuesday showing accelerating inflation at the U.S. consumer level.

Prices are rising for fuel, transportation and all kinds of other things because of tariffs, bad weather affecting food prices and other reasons. But atop them all is the jump in oil prices created by the war with Iran, which has slowed the global flow of crude to customers worldwide.

On Wednesday, oil prices moved more modestly following big gains early in the week, and the price for a barrel of Brent crude oil fell 2 per cent to settle at US$105.63.

But it remains well above its price of roughly US$70 from before the war, and the International Energy Agency said Wednesday that oil inventories worldwide are depleting at a record pace. The resulting jump in oil prices has forced traders to give up most hopes for a cut to interest rates this year by the Federal Reserve. If anything, a hike to rates seems like the next-best bet after no move in rates this year.

Wall Street generally loves lower rates because they would give the economy a boost by making mortgages and other loans cheaper. They can also push upward on prices for stocks and all kinds of other investments, but the downside is they can worsen inflation.

The yield on the 10-year Treasury edged up to 4.47 per cent from 4.46 per cent late Tuesday and is well above its 3.97 per cent level from before the war.

The rise in yields helped send stocks of utilities and real-estate owners to some of the sharper losses in the S&P 500. Such companies tend to pay relatively big dividends, which become less attractive to investors looking for income when bonds are paying more in interest.

American Electric Power fell 3 per cent after announcing a US$2.6 billion offering of its stock.

Elsewhere on Wall Street, Birkenstock Holding dropped 12.9 per cent after the British company said its results for the latest quarter were hurt by U.S. tariffs and other factors.

All told, the S&P 500 rose 43.29 points to 7,444.25. The Dow Jones Industrial Average dipped 67.36 to 49,693.20, and the Nasdaq composite climbed 314.14 to 26,402.34.

In stock markets abroad, indexes rose across much of Europe and Asia.

South Korea’s Kospi led the way with a jump of 2.6 per cent. It had sunk 2.3 per cent the day before, after a senior figure in the administration suggested the government may redistribute windfall AI profits from companies to citizens. That sapped momentum from AI stocks worldwide on Tuesday.

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Stan Choe, The Associated Press

AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.