Wall Street Rallies, With One Big Exception

Wall Street rallied on Thursday after falling oil prices and yields in the bond market eased the pressure on US stocks.

• The S&P 500 rose 30.63 points, or 0.4%, to 7,584.31 for its 10th gain in the last 11 days.
• The Dow Jones Industrial Average rose 874.86 points, or 1.7%, to 51,561.93, a new record.
• The Nasdaq composite fell 23.02 points, or 0.1%, to 26,830.96.

Banks and small companies helped lead the way after oil prices fell close to 3% and Treasury yields dipped. They more than made up for weakness among some influential AI stocks, which sank despite a strong profit report from Broadcom, the AP reports.

The Russell 2000 index of the smallest US stocks jumped 1.4%. Small stocks can reap the biggest benefits when interest rates fall, and the yield on the 10-year Treasury dipped to 4.47% from 4.49% late Wednesday as oil prices sank. Banks also helped lead the market, including gains of 5% for Goldman Sachs, 4.7% for Fifth Third Bancorp and 4.4% for US Bancorp. Zoetis, which sells animal vaccines, climbed 2.5% on expectations for stronger profits after the USDA confirmed Wednesday that the New World screwworm fly has reached south Texas. It's the first time in decades that the parasite with flesh-eating larvae has threatened the nation's cattle industry.

Broadcom sank 12.6%, even though both profit and revenue for the chip company surpassed analysts' expectations. CEO Hock Tan said its AI semiconductor revenue more than doubled to $10.8 billion during the quarter and that demand is only getting bigger. He is forecasting AI semiconductor growth to top 200% in the current quarter. Investors, though, may have wanted even more after Broadcom's stock came into the day with a 38.5% surge for the year so far.

• Analysts have been saying AI stocks may have run too high, becoming too expensive, and that the broad US stock market may be set for a slowdown following an unrelenting streak of nine straight winning weeks for the S&P 500, its longest since 2023.
• Other AI winners likewise gave back some of their big gains. Micron Technology, the latest company to see its total value top $1 trillion because of AI euphoria, fell 7.7%. CrowdStrike Holdings dropped 3.8% even though the cybersecurity company's profit and revenue for the latest quarter topped analysts' expectations. CEO George Kurtz said the latest quarter was when "the worlds of cybersecurity and frontier AI collided," and the company said it's splitting its stock to make its share price more affordable.

Outside of tech, PVH Corp., the company behind the Calvin Klein and Tommy Hilfiger brands, tumbled 20.2% even though it also beat Wall Street's first-quarter sales and profit targets. CEO Stefan Larsson warned that it's feeling "the prolonged effects of the Middle East conflict, which is putting pressure on" customers in the region. Reports on the US economy, meanwhile, came in mixed. One said that slightly more US workers applied for unemployment benefits last week, which could indicate a slowdown in the relatively solid US job market. Another report said that productivity for US workers improved by less during the first three months of the year than economists expected.