Wall Street ticks toward another record as Intel and Nvidia rally

Audio By Carbonatix

NEW YORK (AP) — Wall Street is ticking toward more records on Thursday, led by a rally for tech stocks after Nvidia and Intel announced a $5 billion partnership.

The S&P 500 rose 0.4% and was on track to top its all-time high, which was set at the start of the week. The Dow Jones Industrial Average was down 17 points, or less than 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.8% higher.

Intel soared 26% and was on pace for its best day since 1987 after Nvidia said it would buy $5 billion of the chip maker’s stock. It’s part of a collaboration where the pair will develop custom products for data centers and personal computers. Nvidia climbed 2.5% and was by far the strongest force lifting the S&P 500 because it’s Wall Street’s most valuable company.

Encouraging reports on the economy, meanwhile, helped lift Treasury yields in the bond market. One report said that growth in manufacturing in the mid-Atlantic region was much stronger than economists expected. Another said that fewer U.S. workers applied for unemployment benefits last week than expected.

The report on joblessness came after the prior week’s data showed a disconcerting leap to a four-year high. The job market has slowed so much that the Federal Reserve on Wednesday cut its main interest rate for the first time this year in order to give it some help.

The Fed also indicated more cuts may be on the way this year and next, though Chair Jerome Powell warned that the Fed is stuck in a precarious position and may have to change course quickly. That’s because the economy is in the unusual situation where the job market is slowing when inflation is remaining stubbornly high at the same time.

The Fed is in charge of fixing both, but it has only one tool to do that. And helping one by moving interest rates often hurts the other in the short term.

Expectations are high on Wall Street for the Fed to keep cutting interest rates, and a halt in them could send stocks tumbling. Critics already say their prices have shot too high and become too expensive.

On Wall Street, Novo Nordisk saw its stock that trades in the United States rise 5.5% after the Danish company said a newly published study showed its once-daily pill version of Wegovy helped people lose significant weight. It also said that its Ozempic product reduced the risk of heart attack, stroke and death for patients versus another treatment for people with type 2 diabetes.

On the losing end of Wall Street, Cracker Barrel shares fell 4.1% after the restaurant chain reported a weaker profit for the latest quarter than analysts expected. It also gave a forecast for revenue in its upcoming fiscal year that fell short of analysts’, as the controversy over its planned logo change continues to play out.

The company behind Olive Garden and other chains, Darden Restaurants, sank 8.8% after it likewise reported a profit for the latest quarter that was below analysts's expectations. It also raised its forecast for revenue growth this fiscal year, but not by much more than analysts expected.

The Walt Disney Co. slipped 0.8% after the entertainment giant announced that its ABC television division had suspended Jimmy Kimmel’s late-night show indefinitely after comments that he made about Charlie Kirk’s killing led a group of ABC-affiliated stations to say they would not air the show.

Earlier in the day, FCC Chairman Brendan Carr called Kimmel’s comments “truly sick” and said his agency has a strong case for holding Kimmel, ABC and Disney accountable for spreading misinformation.

In stock markets abroad, indexes rose in Europe following a mixed finish in Asia.

London’s FTSE 100 added 0.1% after the Bank of England held its main interest rate steady.

South Korea’s Kospi jumped 1.4%, and Hong Kong’s Hang Seng fell 1.4% for two of the world’s bigger moves.

In the bond market, the yield on the 10-year Treasury jumped to 4.12% from 4.06% late Wednesday. It’s a notable move after it had briefly dropped below 4% on Wednesday, weighed down by expectations for continued cuts to interest rates by the Fed.

___

AP Writers Teresa Cerojano and Matt Ott contributed.