Nvidia, now the most valuable company on Wall Street, is driving indexes to record highs despite weakness in the economy

The S&P 500 was 0.2% higher in midday trading after setting an all-time high for the 31st time this year ahead of Wednesday’s holiday. The Dow Jones Industrial Average was up 69 points, or 0.2%, as of 11 a.m. ET, and the Nasdaq composite added 0.2% to its record high.

Nvidia rose 2.8% after replacing Microsoft on Tuesday as the most valuable company on Wall Street with a total market value of more than $3.3 trillion. It has been on a remarkable run as a major beneficiary of the stock market frenzy surrounding artificial intelligence technology.

Nvidia’s chips are helping to power the move to AI, which proponents see as producing explosive growth in productivity and profits, and is already up 181.5% this year after more than tripling last year.

Earnings for Nvidia and other AI winners have helped support the stock market despite some weakness in the US economy. High interest rates aimed at reducing inflation have hurt the housing market and manufacturing in particular, while lower-income households are showing signs of struggling to keep up with still rising prices.

Winnebago Industries, for example, has introduced “economy” trailers to attract customers amid “unstable retail models.” But its profit and revenue for the latest quarter fell short of analysts’ expectations. Shares of the motorhome and pontoon maker fell 3.9%.

In a show of how powerful AI can be, Accenture rose 6.2% even as the consulting and professional services company reported weaker-than-expected profit and revenue for the latest quarter. In its earnings report, it highlighted how it earned over $900 million in new bookings for generative AI, bringing its total for the past three quarters to more than $2 billion.

Among the few stocks that did even better than Accenture was Super Micro Computer, which sells servers and storage systems used in AI and other computing. It jumped 7.9% to bring its year-to-date gain to 249.3%.

The supernova for AI stocks has helped mask some subsurface weakness in the market. This could be a worrying signal for market watchers, who would prefer to see a large number of companies pushing the market higher rather than just a handful.

“It’s been common in past cycles, as the stock market is coming to a meaningful top, that the biggest growth names are the ones carrying the load,” according to Scott Wren, senior global market strategist at Wells Investment Institute. Fargo.

Treasury yields rose after a string of mixed reports on the economy. The number of US workers filing for unemployment benefits eased last week, but not as much as economists expected. A separate report said production in the mid-Atlantic is growing, but not as fast as economists thought. Homebuilders, meanwhile, came up with fewer new homes last month than expected.

The hope on Wall Street is actually for a slowdown in the growth of the US economy. That could help keep a lid on inflationary pressures and convince the Federal Reserve to cut its key interest rate later this year. Such a reduction would relieve pressure on the economy and increase investment prices.

Fed officials have indicated they may cut their key interest rate once or twice this year, from its highest level in more than 20 years. Many traders on Wall Street, meanwhile, expect two or more, according to data from CME Group.

The yield on the 10-year Treasury rose to 4.27% from 4.22% late Tuesday. The two-year yield, which more closely tracks expectations for the Fed, rose more modestly to 4.74% from 4.71%.

Several other central banks have already begun to lift the brakes on their economies.

The Swiss National Bank cuts its key rate on Thursday. The Bank of England, however, kept its key rate steady.

Stock indexes rose across much of Europe after the moves. France’s CAC 40 gained 1.3% to recover more of its losses from last week after shock election results. Asian indexes were mixed.

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