A rally for Alphabet helps offset Tesla’s tumble and nudges Wall Street to more records

NEW YORK (AP) - Gains for several big tech companies helped nudge U.S. indexes to more records even as most stocks in the market fell. The S&P 500 edged up 0.1% Thursday to another all-time high. The Nasdaq composite gained 0.2%, adding to its record. The Dow Jones Industrial Average fell 0.7%.

Alphabet climbed after the company behind Google and YouTube delivered a fatter profit than analysts expected. Tesla sank on worries about how much damage its brand has taken because of Elon Musk's foray into politics. Chemical company Dow Inc. tanked after reporting a far bigger loss than expected and cutting its dividend.

THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.

NEW YORK (AP) - Wall Street is hanging near its records on Thursday, though the calm surface of the U.S. stock market is hiding some roiling moves underneath. Alphabet is rising, and Tesla is tumbling following a jumble of profit reports from big U.S. companies.

The S&P 500 was 0.2% higher in late trading, coming off its all-time high set the day before. The Dow Jones Industrial Average was down 228 points, or 0.5%, with less than an hour remaining in trading, and the Nasdaq composite was 0.3% higher.

Alphabet climbed 1.7% after the company behind Google and YouTube delivered a fatter profit for the latest quarter than analysts expected. It's leaning more into artificial-intelligence technology and said it's increasing its budget to spend on AI chips and other investments this year by $10 billion to $85 billion.

That helped push up other stocks in the AI industry, including a 1.6% rise for Nvidia. The chip company was the strongest single force lifting the S&P 500 because it’s the largest on Wall Street in terms of value.

But an 8.4% drop for Tesla kept the market in check. Elon Musk's electric-vehicle company reported results for the spring that were roughly in line with or above analysts' expectations, and Musk is trying to highlight Tesla's moves into AI and robotaxis.

The focus, though, remains on how Musk's foray into politics is turning off potential customers, and he said several rough quarters may be ahead as "we're in this weird transition period where we'll lose a lot of incentives in the U.S."

Stocks have broadly been rallying for weeks on hopes that President Donald Trump will reach trade deals with other countries that will lower his stiff proposed tariffs, along with the risk that they could cause a recession and drive up inflation. The record-setting gains have been so strong that criticism is rising about how expensive stock prices have become. That in turn puts pressure on companies to deliver solid growth in profits in order to justify their gains.

Chipotle Mexican Grill also helped weigh on the market despite delivering a profit for the spring that topped analysts’ expectations. The restaurant chain’s growth in revenue came up short of expectations, and its stock fell 14%.

IBM dropped 8% even though it likewise reported a stronger profit than expected. Analysts pointed to slowing growth in its software business, among other things underneath the surface.

American Airlines lost 9% despite reporting a stronger profit than expected. The company said it expects to report a loss for the summer quarter. It also gave a forecast for full-year results that had a wide range: between a loss of 20 cents per share and a profit of 80 cents per share, depending on how the economy performs.

Reactions in the stock market have generally been stronger than usual when companies beat or miss their profit targets by a wide margin, according to Julian Emanuel at Evercore.

Other extreme moves have also been roaring underneath the market's surface, including huge swings for "meme stocks." Those are stocks where traders are looking to jump in amid online cheerleading and ride it higher, before a halt in momentum leaves some investors holding the bag. Opendoor Technologies is heading for a gain of 9.6% following a manic stretch where it swung by at least 10%, up or down, in 10 straight days.

Such swings, though, haven't been showing up in overall market indexes, which have been gliding recently. The S&P 500 hasn't had a day where it moved by at least 1% in a month.

In the bond market, Treasury yields held relatively steady following the latest signals that the U.S. economy seems to be holding up OK despite pressures on it from tariffs and elsewhere.

One report said that fewer U.S. workers applied for unemployment benefits last week, a potential signal of easing layoffs. A separate report from S&P Global suggested growth in U.S. business activity accelerated in July, and the preliminary results easily topped economists’ expectations.

That helped solidify expectations on Wall Street that the Federal Reserve will hold interest rates steady at its next meeting next week, even though Trump has been agitating angrily for cuts. The European Central Bank, which had earlier been cutting its rates, also held steady on Thursday as it waits to see how Trump's tariffs affect the economy.

The yield on the 10-year U.S. Treasury note edged up to 4.41% from 4.40% late Wednesday.

In stock markets abroad, indexes rose across much of Asia and Europe. Tokyo's jump of 1.6% and London's rise of 0.8% were two of the bigger gains.