The Dow rallies to a record even as Nvidia sags

NEW YORK (AP) - Most U.S. stocks rose and pulled the market back to where it was before last week's swoon. The S&P 500 added 0.2% Tuesday after erasing a loss taken during the morning. It's been bouncing around lately, coming off Monday's vigorous rebound following its first losing week in four.

The Dow Jones Industrial Average rallied 1.2% to a record, surpassing its prior all-time high set two weeks ago.

The Nasdaq composite lagged the market, though, as Nvidia got back to falling amid continued concerns that stocks caught up in the artificial-intelligence frenzy may have become too expensive. The Nasdaq dipped 0.3%.

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

NEW YORK (AP) - Most of Wall Street is rising on Tuesday, and the U.S. stock market is back to where it was before last week’s swoon.

The S&P 500 added 0.2% after erasing a loss taken during the morning. It’s been bouncing around lately, coming off Monday's vigorous rebound following its first losing week in four.

The Dow Jones Industrial Average rallied 539 points, or 1.1%, and was on track to surpass its record set two weeks ago. The Nasdaq composite lagged the market, though, as Nvidia got back to falling amid continued concerns that stocks caught up in the artificial-intelligence frenzy may have become too expensive. The Nasdaq was down 0.2%, as of 2:45 p.m. Eastern time.

Helping to lead the market was Paramount Skydance, which jumped to the biggest gain in the S&P 500 even though the entertainment giant reported revenue and profit for the latest quarter that fell short of Wall Street's expectations.

It was the company's first earnings report since Skydance closed its acquisition of Paramount in early August, and investors appeared to be encouraged that it raised its cost-cutting target to at least $3 billion from the previous $2 billion. Its stock jumped 8.4%.

Close behind was FedEx, which climbed 6% after it increased its forecast for profit in the current quarter. Instead of expecting growth from just the summer, the delivery company is now also expecting profit to rise in this year’s holiday-shopping season from a year earlier.

They helped pull the S&P 500 back within 0.6% of its all-time high, which was set two weeks ago.

They also helped offset a 2.7% drop for Nvidia, which is Wall Street’s most influential stock because of its massive size.

SoftBank, a Japanese technology giant that had been a major investor, said it had sold its entire stake last month in the AI chip company for $5.83 billion. SoftBank is not giving up on AI. It's still focusing on OpenAI, the maker of ChatGPT.

A big question on Wall Street has been whether investors will be willing to push the frenzy around AI stocks even higher. Their sensational growth has been one of the top reasons the U.S. market has hit records despite a slowing job market and still-high inflation. But their prices have shot so high that critics say they’re reminiscent of the 2000 dot-com bubble, which ultimately burst and sent the S&P 500 down by nearly half.

CoreWeave, whose cloud platform helps customers running AI workloads, fell 15.8% even though it reported a smaller loss for the latest quarter than analysts expected. Its revenue also topped expectations, and financial analysts praised its momentum. But investors seemed to focus instead on supply-chain issues delaying a data center and pushing some of CoreWeave’s revenue further into the future.

Back on the winning side of Wall Street, BigBear.ai jumped 7.8% after reporting better results for the latest quarter than analysts expected. It also said it would buy AskSage, a generative AI platform built for national-security agencies and other highly regulated areas, for $250 million.

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

Japan's Nikkei 225 slipped 0.1% even though SoftBank climbed 2%. Besides the sale of its Nvidia stake, the tech giant also reported a much bigger profit than analysts expected.

In the U.S. bond market, trading was closed for the Veterans Day holiday.

Yields have been generally rising since Federal Reserve Chair Jerome Powell warned last month that further cuts to interest rates are not a sure thing. The Fed has already cut its main interest rate twice this year in hopes of shoring up the slowing job market. But it’s worried that inflation, which has stubbornly remained above the Fed’s 2% target, could reaccelerate.

What’s making the Fed’s job potentially more difficult is that the U.S. government’s shutdown has delayed important updates on jobs and other areas of the economy. The Senate has made moves to end what’s become the longest-ever shutdown, but it’s not assured.

That has left the Fed and investors looking at reports coming from sources outside of the government, which have offered a mixed picture.

A job tracker at Goldman Sachs suggests growth slowed in October from September. After including the effect of a deferred resignation program at the government, U.S. employers overall may have cut 50,000 jobs in October, according to economist David Mericle.

Such softening in the job market has traders betting on a roughly two-in-three chance that the Fed will cut interest rates at its next meeting in December, according to data from CME Group. Expectations for such cuts, which Wall Street loves because they can goose the economy and investment prices, are another reason stocks have hit records recently.