Wall Street inches toward more records as Nvidia tops $5 trillion in value

NEW YORK (AP) — U.S. stocks are ticking toward more records on Wednesday after the Federal Reserve cut interest rates, as virtually everyone on Wall Street expected.

The S&P 500 added 0.2% in afternoon trading. The Dow Jones Industrial Average was up 118 points, or 0.2%, as of 2:05 p.m. Eastern time, and the Nasdaq composite was 0.5% higher. All three indexes are coming off their latest all-time high.

The bond market was also relatively steady after the Fed surprised no one by cutting its main interest rate for the second time this year in hopes of helping the slowing job market. Wall Street is still waiting to hear Fed Chair Jerome Powell speak later in the afternoon, and the focus will be on whether he gives hints about more cuts in December and beyond. Wall Street is banking on it.

In the meantime, the deluge continues of big U.S. companies reporting how much profit they made during the summer. The pressure is on to deliver growth because that’s one way they can quiet criticism that their stock prices have shot too high in recent months.

Teradyne soared 20.6% for the biggest gain in the S&P 500 after the company, which makes automated test equipment and advanced robotics systems, reported stronger profit for the latest quarter than analysts expected. CEO Greg Smith credited strength related to artificial-intelligence applications and said “AI-related test demand remains robust.”

Nvidia, meanwhile, was the strongest single force lifting the S&P 500 after rallying 2.8%. It became the first company valued at $5 trillion on Wall Street, just three months after the AI darling was the first to break through the $4 trillion barrier.

Even Caterpillar, the company known for its construction and mining equipment, is feeling a boost because of AI. It rallied 12.2% after reporting stronger profit and revenue for the latest quarter than analysts expected. The strongest growth came from Caterpillar's business that provides equipment for the big data centers that are powering AI.

They helped offset a 43.2% plunge for Fiserv. The payments and financial technology company reported weaker profit for the latest quarter than analysts expected, slashed its profit forecast for the year and revamped its board of directors and leadership team. The stock is heading toward its worst day since it began trading in 1986.

Mondelez International fell 5.2%, even though it reported stronger results than analysts expected. The company, whose brands include Oreo cookies and Toblerone chocolate, has been dealing with high inflation for the cost of cocoa. It expects challenging conditions to continue in some markets, though it hopes that price increases are moderating for cocoa.

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

Tokyo’s Nikkei 225 jumped 2.2% to another record. Seoul’s Kospi rose 1.8% to its own all-time high after President Donald Trump met with South Korea’s leader following his visit in Japan.

Stocks rose 0.7% in Shanghai ahead of a meeting between Trump and China’s leader, Xi Jinping. The world’s two largest economies have been locked in an escalating trade war, with Washington imposing high tariffs and tightened technology controls and China retaliating with curbs on rare earth shipments, one of its key sources of leverage.

In the bond market, the yield on the 10-year Treasury rose to 4.01% from 3.99% late Tuesday.

It's been coming down from nearly 4.80% early this year, a notable move for the bond market, as expectations have climbed for several cuts to rates by the Federal Reserve.

But the Fed has also warned that it may have to halt the cuts if inflation accelerates beyond its still-high level, because lower rates can worsen inflation.

Making an already tough course for Fed officials more difficult is the U.S. government’s shutdown. That has delayed important updates on the economy that would normally help guide the Fed’s decision-making process.

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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.