AI Rally Pushes US Stocks Toward Record Highs
US stock indexes approach record highs driven by AI growth despite rising Treasury yields and negative cash flows for major tech spenders.
U.S. stock indexes are approaching record highs as an artificial intelligence rally drives market growth. The Nasdaq 100 has risen 22% this year, propelled by the performance of Microsoft Corp., Nvidia Corp., and Apple Inc.
This growth coincides with Treasury yields reaching their highest levels since 2002. Investors are concerned that rising interest rates and borrowing costs could jeopardize technology valuations. While high third-quarter earnings expectations support the current rally, massive investments in AI infrastructure have impacted the financial health of major hyperscalers. Alphabet Inc., Amazon.com Inc., and Meta Platforms Inc. have seen their annual free cash flow turn negative, increasing their reliance on debt markets.
Broader market stability remains under pressure from sticky inflation and surging oil prices linked to an ongoing war in Iran. Some investors anticipate that the conclusion of the conflict will lower energy costs and sustain long-term economic growth.
