That helped push up other stocks in the AI industry, including a 1.7 per cent rise for Nvidia. The chip company was the strongest single force lifting the S&P 500 because it’s the largest on Wall Street in terms of value.
But an 8.2 per cent drop for Tesla kept the market in check. Elon Musk’s electric-vehicle company reported results for the spring that were roughly in line with or above analysts’ expectations, and Musk is trying to highlight Tesla’s moves into AI and robotaxis.
The focus, though, remains on how Musk’s foray into politics is turning off potential customers, and he said several rough quarters may be ahead as “we’re in this weird transition period where we’ll lose a lot of incentives in the U.S.”
Stocks have broadly been rallying for weeks on hopes that President Donald Trump will reach trade deals with other countries that will lower his stiff proposed tariffs, along with the risk that they could cause a recession and drive up inflation. The record-setting gains have been so strong that criticism is rising about how expensive stock prices have become. That in turn puts pressure on companies to deliver solid growth in profits in order to justify their gains.
Chipotle Mexican Grill also helped weigh on the market despite delivering a profit for the spring that topped analysts’ expectations. The restaurant chain’s growth in revenue came up short of expectations, and its stock fell 13.3 per cent.
IBM dropped 7.6 per cent even though it likewise reported a stronger profit than expected. Analysts pointed to slowing growth in its software business, among other things underneath the surface.
American Airlines lost 9.6 per cent despite reporting a stronger profit than expected. The company said it expects to report a loss for the summer quarter. It also gave a forecast for full-year results that had a wide range: between a loss of 20 cents per share and a profit of 80 cents per share, depending on how the economy performs.
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Reactions in the stock market have generally been stronger than usual when companies beat or miss their profit targets by a wide margin, according to Julian Emanuel at Evercore.
Other extreme moves have also been roaring underneath the market’s surface, including huge swings for “meme stocks.” Those are stocks where traders are looking to jump in amid online cheerleading and ride it higher, before a halt in momentum leaves some investors holding the bag.
In the bond market, Treasury yields held relatively steady following the latest signals that the U.S. economy seems to be holding up OK despite pressures from tariffs and elsewhere.
One report said that fewer US workers applied for unemployment benefits last week, a potential signal of easing layoffs. A separate report from S&P Global suggested growth in US business activity accelerated in July, and the preliminary results easily topped economists’ expectations.
That helped solidify expectations on Wall Street that the Federal Reserve will hold interest rates steady at its next meeting next week, even though Trump has been agitating angrily for cuts. The European Central Bank, which had earlier been cutting its rates, also held steady on Thursday as it waits to see how Trump’s tariffs affect the economy.
The yield on the 10-year US Treasury note briefly approached 4.44 per cent in the morning before pulling back to 4.40 per cent, where it was late Wednesday.
In stock markets abroad, indexes rose across much of Asia and Europe. Tokyo’s jump of 1.6 per cent and London’s rise of 0.8 per cent were two of the bigger gains.
