The stock market is still at record highs after Nvidia replaces Microsoft as the most valuable company

Nvidia, the chip company that has become Wall Street’s most influential stock, rose again on Thursday, helping to keep US indexes at their record highs despite a mixed set of reports on the economy.

The S&P 500 was up 0.2% in afternoon trading after setting a record high for the 31st time this year before Wednesday’s holiday. The Dow Jones Industrial Average rose 69 points, or 0.2%, as of 11 a.m. Eastern time, and the Nasdaq composite added 0.2% to its own record.

Nvidia rose 2.8% after supplanting Microsoft on Tuesday as the most valuable company on Wall Street with a total market value of more than $3.3 trillion. It has had an incredible rise as the primary beneficiary of the stock market frenzy surrounding artificial intelligence technology.

Nvidia’s chips are helping drive the shift to AI, which proponents say is delivering explosive growth in productivity and profits, and is already up 181.5% this year, after more than tripling last year.

The gains for Nvidia and other AI winners have helped support the stock market despite some weakness in the U.S. economy. High interest rates, intended to reduce inflation, have hurt the housing market and the manufacturing sector in particular, while lower-income households show signs of struggling to keep up with still-rising prices.

For example, Winnebago Industries has introduced “economy” trailers to attract customers amid “inconsistent shopping patterns.” But profit and turnover for the last quarter fell short of analysts’ expectations. Shares of the RV and pontoon maker fell 3.9%.

In a testament to how powerful AI can be, Accenture rose 6.2% even as the consulting and professional services firm reported weaker-than-expected profits and revenues for the latest quarter. In its earnings report, the company highlighted how it secured more than $900 million in new bookings for generative AI, bringing the total for the last three quarters to more than $2 billion.

One of the few stocks that outperformed Accenture was Super Micro Computer, which sells server and storage systems used in AI and other computing systems. It rose 7.9%, taking its year-to-date gain to 249.3%.

The supernova for AI stocks has helped mask some weakness beneath the surface of the market. That could be a worrying signal for market observers, who would prefer to see a large number of companies pushing the market higher rather than just a handful.

“It has been common in recent cycles, as the stock market reaches meaningful tops, for the highest growth names to bear the brunt,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute.

Treasury yields edged higher after a wave of mixed news about the economy. The number of U.S. workers filing for unemployment benefits fell last week, but not as much as economists expected. A separate report said manufacturing in the Mid-Atlantic is growing, but not as fast as economists thought. House builders have taken the first step last month with fewer new-build homes than expected.

The hopes on Wall Street are actually focused on a slowdown in the growth of the US economy. That could help keep inflation pressures in check and convince the Federal Reserve to cut its key interest rate later this year. Such a reduction would ease pressure on the economy and stimulate investment prices.

Fed officials have indicated they could cut their key interest rate once or twice this year, from the highest level in more than two decades. Meanwhile, many Wall Street traders are expecting two or more stocks, according to data from CME Group.

The yield on the 10-year government bond rose to 4.27% from 4.22% late Tuesday. The two-year interest rate, which is more in line with expectations for the Fed, rose more modestly from 4.71% to 4.74%.

Some other central banks have already started to take the brakes off their economies.

The Swiss National Bank cuts its key interest rate on Thursday. However, the Bank of England maintained its key interest rate.

As a result of these developments, stock indices rose in much of Europe. France’s CAC 40 gained 1.3% to recoup more of last week’s losses after shocking election results. Asian indices were mixed.

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