Wall Street edges up as AI enthusiasm eases worries over higher oil prices, yields

Wall Street's major indices opened relatively unchanged on Friday (Sep 25), with AI optimism balancing concerns over high oil prices and rising US Treasury yields. The Dow Jones Industrial Average climbed 226.73 points or 0.44% to 51,576.71, the S&P 500 added 22.49 points or 0.29% to 7,726.62, and the Nasdaq Composite gained 109.38 points or 0.41% to 27,048.75.

Microsoft's Copilot app enhancements, including a coding tool and an always-on AI agent, drove its shares up 3%. Chip makers Micron and Marvell Technology increased about 1% each, while Nvidia rose marginally. AI-related optimism was a prominent factor this week, fueled by Meta's Muse and its Charm device, which gained traction among younger users.

Analysts noted the substantial capital deployment into AI investment, boosting company valuations and productivity. Eight of the 11 S&P 500 sectors declined, with technology leading the gains. Both the S&P 500 and Nasdaq were projected for weekly gains. A report that US and Iranian negotiators were discussing a phased end to the Middle East conflict, involving Iran reopening the Strait of Hormuz and the US lifting its economic blockade, contributed to market sentiment.

However, inflation worries persisted due to ongoing Iran and Ukraine conflicts and soaring government debt. Brent crude prices remained above $100 per barrel, and the 10-year Treasury yield was at 5.1%. Traders now estimate a 64% probability of at least a 25 basis point Federal Reserve rate increase in October, up from roughly 50% earlier in the week.

Upcoming remarks from policymakers, including John Williams, Jeffrey Schmid, and Beth Hammack, are anticipated. US President Donald Trump reported a "productive" meeting with Chinese President Xi Jinping, emphasizing that Chinese support for Iran was unacceptable. Akamai Technologies surged 8% following an $11.6 billion cloud services deal with Anthropic AI, and MGM Resorts International was reportedly exploring a bid for the company.

Advancing issues exceeded decliners on both the New York Stock Exchange and Nasdaq, with the S&P 500 reaching 3 new 52-week highs and 27 new lows, while the Nasdaq Composite recorded 24 new highs and 80 new lows.