By STAN CHOE AP Business Writer
NEW YORK (AP) — Wall Street rallied after falling oil prices and yields in the bond market eased the pressure on U.S. stocks. The S&P 500 rose 0.4% Thursday for its 10th gain in the last 11 days, a day after dropping from its all-time high. The Dow Jones Industrial Average soared 1.7% to a record, and the Nasdaq composite slipped 0.1%. Banks and small companies helped lead the way after oil prices fell close to 3% and Treasury yields dipped. They more than made up for weakness among some influential AI stocks, which sank despite a strong profit report from Broadcom.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Wall Street is rallying Thursday after falling oil prices and yields in the bond market eased the pressure on U.S. stocks.
The S&P 500 rose 0.5% and was heading for its 10th gain in the last 11 days, a day after dropping from its all-time high. The Dow Jones Industrial Average was up 904 points, or 1.8%, with an hour remaining in trading, and the Nasdaq composite was 0.1% higher.
Stocks got a lift from a 2.8% drop for the price of Brent crude oil to $95.03 per barrel. That gave back a chunk of its rise from this week caused by the latest flare-ups of fighting between Iran and the United States and its allies.
The expectation on Wall Street seems to be that the United States and Iran will ultimately agree to reopen the Strait of Hormuz to oil tankers. That would hopefully improve the flow of crude, lower oil’s price and remove some of the upward pressure on inflation that’s hurting the world. Such hopes, along with strong profit reports from U.S. companies, helped launch the S&P 500 on a nine-day winning streak that ended Wednesday, a day short of its longest such run in three decades.
Stocks of smaller companies led the way, and the Russell 2000 index of the smallest U.S. stocks jumped 1.6%. They can reap the biggest benefits when interest rates fall, and the yield on the 10-year Treasury dipped to 4.47% from 4.49% late Wednesday as oil prices sank.
Lower yields can make it easier for companies to borrow cash, which many smaller companies need to do to grow.
Banks also helped lead the market, including gains of 5.1% for Goldman Sachs, 4.2% for Fifth Third Bancorp and 4.1% for U.S. Bancorp.
Zoetis, which sells animal vaccines, climbed 2.4%, and Elanco Animal Health rose 1.9%, on expectations for stronger profits after the U.S. Department of Agriculture confirmed Wednesday that the New World screwworm fly has reached south Texas. It’s the first time in decades that the parasite with flesh-eating larvae has threatened the nation’s cattle industry.
They helped to more than make up for losses by some winners of the artificial-intelligence boom.
Broadcom sank 12.2%, even though both profit and revenue for the chip company surpassed analysts’ expectations. CEO Hock Tan said its AI semiconductor revenue more than doubled to $10.8 billion during the quarter and that demand is only getting bigger. He is forecasting AI semiconductor growth to top 200% in the current quarter.
Investors, though, may have wanted even more after Broadcom’s stock came into the day with a 38.5% surge for the year so far. That towered over the already strong 10.3% rise for the S&P 500 index, and Broadcom has grown to become Wall Street’s sixth-biggest stock and one of its most influential.
Analysts have been saying AI stocks may have run too high, becoming too expensive, and that the broad U.S. stock 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.
Other AI winners likewise gave back some of their big gains. Micron Technology, the latest company to see its total value top $1 trillion because of AI euphoria, fell 5.6%.
CrowdStrike Holdings dropped 4.4% even though the cybersecurity company’s profit and revenue for the latest quarter topped analysts’ expectations. CEO George Kurtz said the latest quarter was when “the worlds of cybersecurity and frontier AI collided,” and the company said it’s splitting its stock to make its share price more affordable.
But its stock came into the day with a 59.5% surge for the year so far. And analysts said it beat forecasts for some financial measures by less than it usually does.
Outside of tech, PVH Corp., the company behind the Calvin Klein and Tommy Hilfiger brands, tumbled 22.7% even though it also beat Wall Street’s first-quarter sales and profit targets. CEO Stefan Larsson warned that it’s feeling “the prolonged effects of the Middle East conflict, which is putting pressure on” customers in the region.
Reports on the U.S. economy, meanwhile, came in mixed. One said that slightly more U.S. workers applied for unemployment benefits last week, which could indicate a slowdown in the relatively solid U.S. job market. Another report said that productivity for U.S. workers improved by less during the first three months of the year than economists expected.
In stock markets abroad, indexes rose in Europe following a weaker finish in Asia.
South Korea’s Kospi fell 1.8%, Hong Kong’s Hang Seng dropped 1.5% and Japan’s Nikkei 225 fell 1.4% for some of the larger losses.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.