U.S. Stocks Drift Near Records as Wall Street Eyes Another Winning Week
NEW YORK (AP) — U.S. stocks are hovering near their all-time highs on Friday as Wall Street gears up for what could be another successful week.
The S&P 500 remained relatively flat in morning trading, set to secure its fourth consecutive week of gains. The Dow Jones Industrial Average saw a modest increase of 59 points, or 0.1%, after briefly surpassing the 40,000 mark for the first time. The Nasdaq composite showed little change as of 10:05 a.m. Eastern time.
While the major indexes appeared calm, there was significant activity happening beneath the surface. Reddit shares surged by 15.5% following the announcement of a partnership with OpenAI, which will integrate the social media platform’s content into ChatGPT and establish an advertising collaboration. The excitement surrounding artificial intelligence technology on Wall Street continues to grow, despite concerns about a potential bubble.
On the flip side, GameStop experienced a decline, giving back some of its substantial gains from earlier in the week. The company’s stock dropped by 25.4% after revealing an expected loss of $27 million to $37 million for the quarter ending May 4. Additionally, GameStop announced plans to sell up to 45 million shares of stock to raise funds, a move that could dilute the holdings of existing shareholders.
This trend of companies issuing new shares to raise capital was also seen with AMC Entertainment earlier in the week. The movie theater chain announced it would issue nearly 23.3 million shares of stock to reduce debt, following a surge in its stock price driven more by investor enthusiasm than fundamental changes in the company’s financial outlook.
Notably, even prominent investors like Renaissance Technologies, founded by Jim Simons, bought shares of GameStop and AMC Entertainment before the end of the first quarter.
In global financial markets, Treasury yields remained steady, while stock indexes showed mixed results. This week has been positive for markets overall, with hopes of inflation moving in the right direction and speculation about potential interest rate cuts by the Federal Reserve.
While some traders anticipate multiple rate cuts this year, economists caution that optimism may be excessive. Bank of America’s Michael Gapen predicts the Fed will maintain its main interest rate until December, despite recent data reports exceeding expectations.
In the bond market, the 10-year Treasury yield inched up to 4.39%, while the two-year yield, which reflects Fed expectations, dipped slightly to 4.79%.
Overseas, Chinese and Hong Kong markets saw gains after China’s central bank announced measures to support the property market. However, indexes in Seoul, Tokyo, and much of Europe experienced declines.
As Wall Street navigates these developments, the balancing act of managing inflation and economic growth remains a key focus for investors and policymakers alike.
