By STAN CHOE, Associated Press Business Writer
NEW YORK (AP) — Most U.S. stocks are rising Tuesday following updates on the economy that kept alive hopes for a coming cut to interest rates and some mixed profit reports from big companies.
The S&P 500 edged up a mere 0.1% in early trading, even though four out of every five stocks within the index were climbing. The Dow Jones Industrial Average was up 288 points, or 0.6%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.3% lower.
The relatively modest moves masked some swings underneath the surface, particularly among stocks linked to the artificial-intelligence industry.
Alphabet rose another 1.6%, continuing a strong run on excitement about its recently released Gemini AI model. Alibaba, meanwhile, saw its stock that trades in the United States bounce between gains and losses after the Chinese giant reported a stronger jump in revenue for the latest quarter than analysts expected thanks in part to the AI boom.
Some chip companies dropped sharply following a report from the Information that Meta Platforms is in talks to spend billions of dollars on AI chips from Alphabet instead of them. Nvidia sank 4.8%, and Advanced Micro Devices dropped 7.4%.
Mixed profit reports also caused big swings for several retailers.
Abercrombie & Fitch soared 20.9% after the apparel seller reported a stronger profit for the latest quarter than analysts expected. It also raised the bottom end of its forecast for revenue and profit over the full year.
Koh’s surged 32.4% after reporting a profit for the latest quarter, when analysts were expecting a loss.
They helped work against a 3.2% drop for Dick’s Sporting Goods, which reported a weaker profit than expected. Executive Chairman Ed Stack said the company is “cleaning out the garage” by clearing inventory at Foot Locker, which it recently bought.
Helping to keep the overall market calm were hopes that the Federal Reserve will cut its main interest rate at its next meeting in December. The Fed has already cut interest rates twice this year in hopes of shoring up a slowing economy, and lower interest rates can cover up a lot of sins in financial markets, including prices going too high.
A deluge of economic data on Tuesday left traders betting on a nearly 85% probability that the Fed will cut in December, according to data from CME Group. That’s roughly the same as a day before and up sharply from the coin flip’s chance seen a week ago.
One report said that shoppers bought less at U.S. retailers in September than economists expected, a signal of a potential slowdown for the economy.
A separate report said that inflation at the wholesale level was a touch worse in September than economists expected, but a closely tracked underlying trend was slightly better. That’s important because lower interest rates can make inflation worse, and still-high inflation is one of the main reasons the Fed could hold off on more cuts.
In the bond market, the yield on the 10-year Treasury eased to 4.01% from 4.04% late Monday.
In stock markets abroad, indexes rose modestly across much of Europe and Asia.
AP Business Writer Elaine Kurtenbach contributed.