By STAN CHOE, AP Business Writer
NEW YORK (AP) — Amazon and resurgent stocks of computer chipmakers are leading the U.S. stock market higher on Friday, even as oil prices rise and worries about inflation weigh on the bond market.
The S&P 500 rose 0.7% at the end of a seesaw week that could be its first winning one in the last three. The Dow Jones Industrial Average was up 179 points, or 0.3%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1.3% higher.
Tech led the way, including a 13.8% leap for Amazon after it reported much stronger profit for the latest quarter than analysts expected. Its profit more than tripled from a year earlier, thanks in part to an acceleration of growth in its cloud computing business.
Analysts said that could be a signal Amazon’s huge investments in artificial-intelligence technology are beginning to pay off, and Amazon increased its forecast for how much it will spend on investments this year.
The stock reaction was similar to what Microsoft got a day before, when it soared to its best day in nearly 18 years on signals that its AI investments may also be paying off in terms of higher profits.
Worries had been rising on Wall Street that companies pouring billions of dollars into AI data centers may not get enough profit and productivity to make all the investments worth it. That weighed on the broad U.S. stock market, putting it on track for a losing July, along with worries that prices shot too high for the stocks of companies selling the processors and computer memory that such “hyperscalers” are vacuuming up.
Those chipmakers jumped again on Friday, following their gains on Thursday. Micron Technology rose 5.9%, and Advanced Micro Devices climbed 6%. They were two of the strongest forces lifting the S&P 500 after Amazon.
The gains for chip stocks were even more extreme in South Korea, whose stock market has been home to some of the world’s wildest AI swings.
Seoul’s Kospi index soared 17.9% for its best day in history. The index is dominated by two tech giants, Samsung Electronics and SK Hynix, which both soared at least 26.8% on Friday.
The Kospi, though, still lost 22% in July despite Friday’s historic surge. That’s after it more than doubled in the first six months of the year.
On the losing end of Wall Street was Apple, which fell 9.1% despite reporting stronger profit for the latest quarter than expected. Analysts say it’s almost become an “anti AI” bet among Big Tech stocks because of its more limited spending on the technology versus rivals.
In the oil market, prices swung higher as uncertainty continues about when oil can begin flowing freely from producers in the Middle East to customers worldwide because of the war with Iran.
The price for a barrel of Brent crude rose 2.1% to $88.68.
That pushes up pressure on inflation, and yields climbed further in the bond market.
The yield on the 10-year Treasury jumped to 4.72% from 4.68% late Thursday and from just 3.97% before the war with Iran sent oil prices shooting higher. Its leaps have already sent the average long-term U.S. mortgage rate to its highest level in a year.
AP Business Writers Chan Ho-him and Elaine Kurtenbach contributed to this report.
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