US stocks: Nasdaq reaches record high close, AI stocks rally

THE Nasdaq notched a record high close on Tuesday (Sep 22), lifted by Micron Technology and other AI-related stocks, while the S&P 500 hovered just below a record high as oil prices traded around US$100 per barrel.

Chip stocks added to recent gains while consumer-related software shares lost ground. Investors focused on the strong reception of Meta Platforms’ AI assistant, which launched this month and can send emails and complete transactions on behalf of a user.

The success of the AI assistant, called Muse, has fueled gains for AI-related chip stocks in recent days. Yet some worried it could compete with retailers, online brokerages and other consumer companies. Amazon on Monday blocked the agent from shopping on its platform.

“There are a lot of tech stocks that are down today on Muse-related fears of one sort or another,” said Jed Ellerbroek, portfolio manager at Argent Capital Management. “People fear that Muse will be used to manage your insurance relationships, book your travel and search for stuff to buy.”

Ride-hailing apps Uber Technologies and Lyft lost more than 1 per cent each, while Charles Schwab lost 6.1 per cent and Airbnb declined 3 per cent.

Micron rallied 5 per cent and Sandisk gained almost 7 per cent.

Oil prices were choppy near US$100 a barrel, while the yield on the benchmark 10-year Treasury note hovered around 4.94 per cent after US President Donald Trump warned in a speech to the UN General Assembly that he could “annihilate the Islamic Republic” if no deal is reached to end the Middle East conflict.

Investors also awaited a US-China summit on Thursday, with traders speculating the trade truce with Beijing could be extended and talks could touch on AI regulation.

“What people are looking for is at least the start of a conversation that maybe you can come up with some sort of global framework as opposed to fighting each other ...” said Joe Saluzzi, head of equity market structure research at Themis Trading.

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The S&P 500 ended essentially flat at 7,764.64 points.

The Nasdaq gained 0.45 per cent to 27,244.28 points, its second straight record high close.

The Dow Jones Industrial Average declined 0.36 per cent to 51,863.69 points.

Volume was heavy on US exchanges, with 17.9 billion shares traded, compared to an average of 16.3 billion shares over the previous 20 sessions.

Six of the 11 S&P 500 sector indexes declined, led lower by financials, down 1.68 per cent, followed by a 0.8 per cent loss in communication services.

The S&P 500 was less than 0.5 per cent below its Aug 13 record high close.

JPMorgan Chase and Wells Fargo both lost more than 3 per cent.

Boston Federal Reserve President Susan Collins wrote she supported last week’s interest rate increase, citing inflation risks.

New York Fed President John Williams said the Fed’s framework for controlling short-term rates has been effective in supporting financial markets.

Traders see a 53 per cent chance the Fed will increase interest rates by at least 25 basis points in October, the CME Group’s FedWatch Tool showed.

The S&P 500 saw about the same number of stocks climb as decline.

The S&P 500 posted nine new highs and 16 new lows; the Nasdaq recorded 48 new highs and 110 new lows. REUTERS