The S&P 500 and the Nasdaq hit record highs on Thursday as robust results from Google parent Alphabet fueled optimism about other heavyweight AI stocks, but Tesla slumped after the electric vehicle maker’s results disappointed investors. Alphabet GOOGL.O rose 1.6% as the Google parent’s results boosted confidence that heavy investment in a race to dominate AI technology is paying off. Shares of Microsoft MSFT.O , Nvidia NVDA.O and Amazon AMZN.O climbed over 1%. The U.S.-Japan trade deal and recent signs of progress in talks with the European Union also fueled Wall Street’s gains.
Tesla TSLA.O tumbled almost 9% after CEO Elon Musk warned of a “few rough quarters” as the U.S. government cuts support for electric vehicle makers. The stock has fallen about 25% so far in 2025. UnitedHealth lost 3.7% after the insurer revealed it was cooperating with a Department of Justice probe into its Medicare practices, following reports of both criminal and civil investigations. IBM dropped 8% after its second-quarter results fell flat with investors, hampered by disappointing sales in its core software division. Honeywell fell 4.6% despite topping Wall Street’s expectations and raising its annual outlook.
The S&P 500 was up 0.32% at 6,379.21 points. The Nasdaq gained 0.41% to 21,106.64 points, while the Dow Jones Industrial Average was down 0.34% at 44,855.18 points, and it remained near its December 4 record high. Seven of the 11 S&P 500 sector indexes rose, led by information technology .SPLRCT , up 0.87%, followed by a 0.86% gain in communication services .SPLRCL . American Airlines AAL.O tumbled almost 8% after the carrier forecast a big third-quarter loss, hurt by sluggish domestic travel demand. The U.S. President’s global trade war has created the biggest uncertainty for the airline industry since the COVID-19 pandemic.
A fresh Labor Department report showed jobless claims last week fell to 217,000 – well below estimates – signaling continued resilience in the U.S. job market. U.S. business activity gained momentum in July, but companies hiked prices on goods and services, fueling economists’ predictions of faster inflation in the months ahead, largely driven by rising import tariffs.
Declining stocks outnumbered rising ones within the S&P 500 .AD.SPX by a 1.0-to-one ratio. The S&P 500 posted 44 new highs and 6 new lows; the Nasdaq recorded 72 new highs and 37 new lows.
Reporting by Nikhil Sharma and Pranav Kashyap in Bengaluru, and by Noel Randewich in San Francisco; Editing by Maju Samuel and David Gregorio.
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