Wall St’s AI surge defies inflation woes
AI-fueled Wall Street’s stocks surged to record highs, despite US inflation not meeting expectations and a rise in treasury yields, Reuters reported on Wednesday.
The core CPI inflation rate dropped to 3.8 per cent, slightly above forecasts, while the headline inflation rate unexpectedly rose to 3.2 per cent.
The bond market reacted negatively, but interest rate futures still reduced the likelihood of the Federal Reserve easing.
The surge in AI stocks was given a fresh boost by Oracle’s better-than-expected performance, driven by AI advancements, leading to a 12 per cent jump in its share price.
This enthusiasm was further fueled by the anticipation of a collaborative announcement with Nvidia, a leading figure in AI technology.
Additionally, Arm Holdings saw a 2 per cent increase in shares as it approached the end of its lockup period following a successful IPO last year.
The S&P 500 hit a new high despite inflation concerns, with the market still anticipating Federal Reserve rate cuts. Bank of America increased its S&P 500 profit growth forecast to 12 per cent, targeting 5,400 by year-end. Meanwhile, scepticism about an AI stock bubble persists.
In global markets, Chinese stocks fell due to real estate issues, and Japan’s Nikkei dropped amid policy change expectations. The dollar strengthened, and Bitcoin’s price soared past $73,000 as it approaches a significant halving event.
