NEW YORK — A drop for Alphabet, one of Wall Street’s most influential stocks, is helping to slow the U.S. stock market’s record-breaking rally on Tuesday.
The S&P 500 slipped 0.1 per cent a day after setting its latest all-time high. The Dow Jones Industrial Average was up 65 points, or 0.1 per cent, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.3 per cent lower.
Analysts have said the market may be set for a slowdown following an unrelenting streak of nine straight winning weeks for the S&P 500, its longest since 2023. The rally has built with strong profit reports from U.S. companies, as well as hopes that the United States and Iran will reach a deal to reopen the Strait of Hormuz and allow oil to flow freely again from the Persian Gulf and lower its price.
The heaviest weight on the market was the parent company of Google, which fell four per cent after saying it is raising US$80 billion in cash by selling its stock. The company said it plans to use some of that cash to pay for its huge investments in artificial-intelligence technology.
It’s planning to spend as much as $190 billion on equipment and other investments this year, with forecasts for spending “to significantly increase” next year.
Such huge sums raise the question about whether AI can produce the profits and productivity necessary to make all the investment worth it. Critics have already been talking about the possibility of a bubble in AI investment.
In the meantime, the companies selling the shovels and picks in Wall Street’s latest gold rush continue to benefit.
Hewlett Packard Enterprises soared 31.5% after reporting a profit for the latest quarter that blew past analysts’ expectations. It credited demand from customers building their AI capabilities.
Generac climbed 7.7% after it said it signed a deal with an unnamed “leading hyperscale data center operator” to provide it with backup power generators.
Chip companies also continued to rally, and Broadcom jumped 4.8%.
In the oil market, prices were calmer following Monday’s bounce back. Brent crude oil, the international standard, slipped 0.3% to $94.71 per barrel, though that’s still well above the roughly $70 level it was at before the war.
In the bond market, Treasury yields were relatively steady ahead of a report coming later in the morning about the job market. Economists expect it to show U.S. employers were advertising slightly fewer job openings at the end of April than a month earlier.
The yield on the 10-year Treasury slipped to 4.45% from 4.47% late Monday.
In stock markets abroad indexes were mixed across Europe and Asia.
Hong Kong’s Hang Seng jumped 2.5% for one of the world’s biggest moves.
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AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.
By Stan Choe
