Dow sets new record as tech losses weigh on broader market

NEW YORK (AP) — The Dow Jones Industrial Average reached another record even as drops elsewhere in the market kept other indexes in check. The Dow rose 0.7% Wednesday, adding to the all-time high it set a day earlier. The S&P 500 edged up 0.1% and remains near its all-time high set a couple weeks ago.

Treasury yields eased in the bond market.

The Nasdaq composite fell 0.3%. Advanced Micro Devices jumped after forecasting strong growth over the coming years, driven by AI. AI stocks have been shaky recently, as investors question whether they can add much more to their already spectacular gains.

Their sensational performances have been among the top reasons the U.S. market has hit record highs despite a slowing job market and high inflation. Their prices have shot so high, though, that critics say they’re reminiscent of the 2000 dot-com bubble, which ultimately burst and dragged the S&P 500 down by nearly half.

Nvidia came into the day with a 4.6% drop for the month so far, for example, after its stock price more than doubled in four of the last five years. The biggest player in AI chips swung between gains and losses on Wednesday. Palantir Technologies, another AI darling, fell 4.5% for one of the day’s largest losses in the S&P 500.

Similar questions about priciness are dogging the rest of the U.S. market, though other stocks aren’t getting as much criticism as Big Tech and AI superstars.

One way for stock prices to look less expensive is for companies to deliver big growth in profits.

On Holdings jumped 18.7% after the Swiss shoe and apparel company reported a much bigger profit for the latest quarter than analysts expected. It reported growth in sales worldwide, particularly in Asia.

But even beating expectations may not be enough for some stocks. Circle Internet Group fell 11.3% even though it reported a profit for the latest quarter that trounced analysts’ estimates.

The stock price of the issuer of one of the most popular cryptocurrencies has been generally falling since it reached nearly $300 in June, just a few weeks after its initial offering price of $31. It’s now below $88.

Another way for stock prices to look less expensive is if interest rates fall. That’s because bonds paying lower yields can encourage investors to pay higher prices for other investments.

In the U.S. bond market, the yield on the 10-year Treasury eased to 4.06% from 4.13% late Monday after trading resumed following Tuesday’s Veterans Day holiday.

Traders still see a nearly 2-in-3 chance that the Federal Reserve will cut its main interest rate at its next meeting in December, according to data from CME Group. That’s despite Fed Chair Jerome Powell saying a third cut for the year is far from a sure thing. Fed officials are worried about the potential of giving still-high inflation more fuel.

The Fed has been in a difficult spot recently because the U.S. government has not been publishing its usual updates on the job market, inflation and other areas of the economy. That’s restricted its view of how things are going, though the nation’s longest-ever shutdown appears to be nearing an end.

In global stock markets, indexes rose across much of Europe and Asia.

Germany’s DAX returned 1.2%, and South Korea’s Kospi jumped 1.1% for two of the world’s biggest gains.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.