Wall Street muscles higher despite more swings for AI stocks
[October 16, 2026] By
STAN CHOE
NEW YORK (AP) — U.S. stock indexes muscled higher Thursday, led by
companies delivering bigger profits. They pulled closer to their records
even as stocks in the artificial-intelligence industry kept swinging on
worries about how much longer their boom will last.
The S&P 500 rose 0.3% after erasing an early-morning loss and pulled
closer to its all-time high set last week. The Dow Jones Industrial
Average jumped 556 points, or 1.1%, while the Nasdaq composite added
0.1%.
Marsh & McLennan helped lead the way and rallied 4.6% after the
insurance and professional services firm that updated its brand name to
Marsh reported a stronger profit for the summer than analysts expected.
Expectations are high for growth in profits from all kinds of companies
this reporting season, which began in earnest this week. That’s what’s
allowed U.S. stocks to set records despite high inflation and the many
other worries weighing on Wall Street.
Kimberly-Clark climbed 4.7% after the company behind Huggies, Kleenex
and Kotex said it expects to report revenue and profit for the latest
quarter above what analysts had been expecting. Bank of New York Mellon
rose 3.2% after reporting a stronger profit than analysts expected, and
CEO Robin Vince said BNY saw strength across its regions.
Markets had been much shakier earlier in the day. A sell-off for AI
stocks that began on Wall Street Wednesday whipped around the world and
sent South Korea’s Kospi stock index down 7.6% and Japan’s Nikkei 225
down 4.9% before knocking the S&P 500 lower at the start of Thursday’s
trading.
They’re the latest jarring moves for AI stocks after they led the market
for years. Companies are pouring money into the technology in hopes of
bigger profits and improved productivity. But data centers and AI chips
cost money, and many companies have been borrowing the cash to get them.
Now, after yields in bond markets worldwide hit their highest levels in
years and made borrowing money more expensive, worries are rising about
how resilient that boom in spending can be. High yields in the bond
market also generally make investors less willing to pay high prices for
stocks, particularly those seen as the most expensive.
Nvidia, the chip company that’s ridden the AI boom to become Wall
Street’s most valuable company, fell 1.8% and was the heaviest weight on
the S&P 500. It came into the day with a nearly 1,415% gain since the
end of 2022.
But the losses for AI stocks moderated as the day progressed, which
helped broad U.S. indexes to steady. Nvidia more than halved an
early-morning loss that had reached 3.8%.
Taiwan Semiconductor Manufacturing Co. ’s stock that trades in the
United States dropped as much as 5.3% in the morning before finishing
with a more modest loss of 1.8%. The bellwether for the AI industry
reported a profit for the latest quarter that topped analysts’ high
expectations, and Chief Financial Officer Wendell Huang said it expects
strong demand to continue in the final three months of 2026.
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People pass the New York Stock Exchange on Nov. 5, 2024, in New
York. (AP Photo/Peter Morgan, File)
 CoreWeave, which offers AI computing
power to customers over the cloud, fell as much as 9.5% in the
morning after tumbling 15.5% a day earlier. It later flipped to a
gain and finished 5.9% higher.
All told, the S&P 500 rose 25.12 points to 7,744.06. The Dow Jones
Industrial Average jumped 556.21 to 52,177.69, and the Nasdaq
composite added 20.16 to 26,713.03.
In the bond market, Treasury yields fell, which means investors were
willing to pay higher prices to buy U.S. government bonds. Treasurys
have a reputation as a safer investment, and investors often flock
to them when feeling nervous.
The yield on the 10-year Treasury sank to 5.09% from 5.19% late
Wednesday. It had topped 5.30% earlier this month and touched its
highest level since 2002 because of worries about high inflation,
signals of a strong U.S. economy and other factors.
The drop in yields came even though another report signaled
inflation has worsened in the United States by more than economists
expected.
Several reports on the U.S. economy also came in stronger than
economists expected, which typically pushes yields upward. One
report said U.S. retailers made more money last month than
economists expected, while another said fewer U.S. workers applied
for unemployment benefits last week than expected.
In stock markets abroad, South Korea’s loss was the headliner. Its
Kospi index is dominated by two chip companies, Samsung Electronics
and SK Hynix, and it fell to its worst day since July. It has
dropped 39% since setting a record in June.
Indexes were stronger in Europe, which has less of a dependence on
tech stocks. London’s FTSE 100 rallied 1.1% for one of the world’s
biggest gains.
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AP Business Writers Chan Ho-him and Matt Ott contributed to this
report.
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