US stocks opened higher on Wednesday as enthusiasm for artificial intelligence shares helped the S&P 500 and Dow Jones Industrial Average withstand renewed tensions between Washington and Tehran.
At 9.56am in New York, the Dow was up 246.01 points, or 0.47%, at 53,012.89. The S&P 500 had gained 8.22 points, or 0.11%, to 7,639.69, while the Nasdaq Composite slipped 14.92 points, or 0.06%, to 26,084.86.
The latest US-Iran clashes have revived fears of a wider regional conflict and raised concerns about inflation, but investors continued to back the longer-term growth prospects of the AI sector.
“When it comes to AI, we’re just at the precipice. We are at the beginning of what is a very significant revolution in the way technology and data is managed,” said Thomas Kikis, head of markets for the US and Americas at Standard Chartered.
Dell was among the strongest performers, rising 6.7% after raising its annual revenue and profit forecasts on the back of demand for AI servers. Brown-Forman, the maker of Jack Daniel’s, advanced 4.2% after reporting better-than-expected first-quarter profits.
Within the so-called Magnificent Seven technology group, Nvidia shares rose 1.2%, while Microsoft fell 0.5% and Tesla dropped 1%.
Markets remained under pressure from elevated US Treasury yields, which can make equities less attractive by offering investors higher returns from relatively safer assets. The yield on the benchmark 10-year Treasury note fell by two basis points but remained close to its highest level since January last year.
“Investors are very concerned about the upward trend in global bond yields and as a result, are lightening their exposure to equities where they have substantial profits,” said Sam Stovall, chief investment strategist at CFRA Research.
Higher energy prices caused by any further escalation in the Middle East could also complicate the Federal Reserve’s interest-rate decisions. Traders have sharply increased their expectations of a rate rise in September over the past week, with markets pricing in a 66.2% chance, compared with about 37% previously.
Investors are also looking ahead to Friday’s US jobs report, which could provide fresh clues about the health of the economy and the likely direction of monetary policy.
