By Medha Singh and Twesha Dikshit
June 2 (Reuters) – The Dow and the S&P 500 scaled fresh record highs on Tuesday as strong results from Hewlett Packard Enterprise and a funding commitment from Alphabet reinforced confidence in the AI buildout.
HPE surged about 26%, on track for a record one-day percentage gain, after the AI server maker pulled forward its long-term financial targets by two years. Peer Super Micro Computer climbed 6%, while chipmakers gained 5%.
Alphabet said it was looking to raise $80 billion in equity offerings, including an investment from Berkshire Hathaway, to fund a costly expansion of its AI infrastructure. While Alphabet’s stock itself slipped nearly 2.5%, dragging down the communications services index almost 1.5%, the news fanned optimism around AI infrastructure spend.
“It confirms the insatiable demand that we’re seeing really across the board for AI. Every day it seems like a different company comes out with incredible signs that this wave of AI is alive and well,” said Ryan Detrick, chief market strategist at Carson Group.
The S&P 500 and the Nasdaq logged their eighth straight session of gains on Monday and closed at record levels after Nvidia unveiled a new processor to bring AI to personal computers.
Marvell Technology’s shares surged more than 26% to over $240 billion in market value after Nvidia Chief Executive Officer Jensen Huang called the chipmaker the next “trillion dollar company” at the Computex conference in Taipei. Nvidia invested $2 billion in Marvell in March.
At 11:26 a.m. ET, the Dow Jones Industrial Average rose 155.84 points, or 0.31%, to 51,234.72, the S&P 500 gained 17.47 points, or 0.23%, to 7,617.43 and the Nasdaq Composite gained 73.42 points, or 0.27%, to 27,160.23.
Seven out of 11 major S&P 500 indexes were in the green, with utilities advancing the most.
The software index dropped 3.7% as a recovery rally stalled following a 14% surge in the last three sessions. ServiceNow, Salesforce and Intuit were down between 6% and 10%. Microsoft dropped 3.7%.
Microchip Technology advanced 6% after an upbeat data center revenue forecast.
Upbeat first-quarter results and AI enthusiasm have driven the rally on Wall Street, with hopes for an end to the U.S.-Iran conflict and a reopening of the Strait of Hormuz adding support.
But recent flare-ups in tensions have raised concerns that a prolonged conflict could stoke inflation, push the Federal Reserve toward tighter policy and threaten Wall Street’s record run.
U.S. Secretary of State Marco Rubio told lawmakers that Iran had agreed to negotiate aspects of its nuclear program that it previously refused to discuss.
“There’s a lot of uncertainty there, especially when it comes to the increase we got in oil prices yesterday because of that. We’re seeing that some of the momentum trade is losing a little bit of steam,” said Megan Horneman, chief investment officer at Verdence.
Cleveland Federal Reserve President Beth Hammack, a voting member of the central bank’s policy-setting committee, said the Fed may need to raise interest rates soon should already high inflation pressures continue to mount.
Money market pricing shows traders have all but priced out rate cuts for 2026 and see growing odds of an eventual hike.
Advancing issues outnumbered decliners by a 1.55-to-1 ratio on the NYSE, decliners outnumbered advancers by a 1.01-to-1 ratio on the Nasdaq.
The S&P 500 posted 22 new 52-week highs and 15 new lows while the Nasdaq Composite recorded 96 new highs and 71 new lows.
(Reporting by Medha Singh and Twesha Dikshit in Bengaluru; Editing by Shinjini Ganguli and Devika Syamnath)
