NEW YORK — The U.S. stock market is rising on Wednesday, led by its most influential stock, Nvidia.
The S&P 500 climbed 0.6% and pulled within 1.4% of its all-time high set late last month. The Dow Jones Industrial Average was up 222 points, or 0.5%, as of 10 a.m. Eastern time, and the Nasdaq composite was 0.8% higher.
Nvidia climbed 2.2% after Meta Platforms announced a long-term partnership where it will build data centers using millions of chips and other equipment from Nvidia to help its artificial-intelligence ambitions.
“No one deploys AI at Meta’s scale,” Nvidia CEO Jensen Huang said. Because his company is the most valuable on Wall Street, Nvidia’s stock was the single most powerful force pulling the S&P 500 higher.
That performance demonstrated the upside of AI development for the U.S. stock market. But investors have been more focused on the potential downsides recently, which has led to sharp swings for Wall Street. Worries are rising on one hand about how much companies like Meta are spending on AI and whether they can possibly make back such heavy investments through higher profits and productivity in the future.
Meta’s stock slipped 0.4%.
Another big worry is that if AI succeeds in creating tools to do complicated tasks more cheaply, companies in industries as far flung as software and legal services may see their businesses get undercut. That has led investors to suddenly and aggressively punish stocks of companies seen as under threat, and analysts have likened it to a "shoot first-ask questions later" mentality.
Several profit reports from companies helped to lift stocks Wednesday. They continued what’s been a strong reporting season for the big U.S. companies in the S&P 500 so far.
Cadence Design Systems climbed 7.2% after delivering both profit and revenue for the latest quarter that topped analysts’ expectations. CEO Anirudh Devgan credited what he called “the essential nature of Cadence’s engineering software,” even as investors worry about AI threatening to remake the industry.
Analog Devices rose 2.1% after likewise topping analysts’ estimates for profit and revenue. The chip company said it saw record orders during the quarter for its data center business.
Outside of earnings reports, Moderna jumped 6.9% after saying regulators at the Food and Drug Administration will review its flu vaccine candidate after earlier refusing to consider it.
They helped offset an 8.7% drop for Palo Alto Networks. The cybersecurity company reported a stronger profit for the latest quarter than analysts expected, but it gave profit forecasts for the current quarter and the remainder of its fiscal year that fell short of their estimates.
In the bond market, Treasury yields ticked higher ahead of the afternoon’s release of minutes from the latest meeting of the Federal Reserve. The yield on the 10-year Treasury rose to 4.08% from 4.05% late Tuesday.
The Fed has put a pause on its cuts to interest rates, but many on Wall Street expect it to resume later this year. Details within the last meeting's minutes could alter bets for when that could be exactly. The heavy expectation is that it will come during the summer, after a new chair is scheduled to step in atop the Fed.
Lower rates can give a boost to the economy and prices for investments, but that comes at the cost of potentially worsening inflation.
In stock markets abroad, London's FTSE 100 climbed 1.3% after the latest update on U.K. inflation bolstered expectations that the Bank of England may soon cut interest rates there.
Japan's Nikkei 225 rose 1% as Prime Minister Sanae Takaichi was reappointed by the parliament following a landslide victory for her ruling Liberal Democrats in a Feb. 8 election. The expectation is that she will push through policies to help the economy and markets.
Moves in other stock markets were more muted, and several were closed for the Lunar New Year holiday.
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AP Business Writer Elaine Kurtenbach contributed.
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