Tech tailwind nudges Wall Street higher as AI chip optimism builds

The original story by Stan Choe for AP.

Stocks inched up Thursday, with Big Tech doing the heavy lifting after a fresh dose of good news for the AI trade. By late morning Eastern, the S&P 500 was up 0.4%, the Dow added 85 points, or 0.2%, and the Nasdaq climbed 0.7%. It’s been a whipsaw week, but the latest spark came from Taiwan Semiconductor Manufacturing Co., which topped profit forecasts and said it sees “continued strong demand for our leading-edge process technologies” into year-end — welcome words for a market obsessed with AI’s supply chain.

Because TSMC fabs chips for the sector’s stars, including Nvidia, its outlook matters well beyond Taipei. The stock rose 1.4% in Taiwan even as its US-listed shares slipped 0.5%. Nvidia gained about 1.4% and, as the market’s most valuable name, gave the S&P 500 its biggest single boost. AI-linked names have powered a drumbeat of record highs this year despite sticky inflation and a cooling jobs market, a run so steep that skeptics keep muttering “dot-com” under their breath.

With the S&P 500 up roughly 35% off its April low, corporate America now has to prove those valuations with fatter profits. Salesforce helped the bull case, jumping 4.5% after laying out a plan for better than 10% compounded annual revenue growth in the years ahead. J.B. Hunt roared 18.8% after trouncing third-quarter estimates. Offsetting some of that cheer, Travelers fell 2.7% on a revenue miss despite stronger profit, and Hewlett Packard Enterprise sank 8.5% after long-term targets underwhelmed analysts.

Overseas trading leaned green across much of Asia and Europe. South Korea’s Kospi surged 2.5% on hopes for a US–Korea trade deal, lifting Samsung and automakers Hyundai and Kia. China was mixed, with Shanghai up 0.1% and Hong Kong down 0.1%. In bonds, the 10-year Treasury yield eased to 4.03% from 4.05% late Wednesday.

A downbeat mid-Atlantic manufacturing read added to the data fog as Washington’s latest shutdown delays key reports, including the usual Thursday jobless claims update and a major inflation print that was pushed back a day earlier. Fed officials have hinted the labor market is now the swing factor, a setup that could clear the way for more rate cuts — one of the engines behind this rally — unless inflation flares again and forces a rethink.