US stocks are drifting around their records as AMD rallies

Advanced Micro Devices was one of the strongest forces lifting the market, and it rallied 5.9% after CEO Lisa Su said the chip company is expecting better than 35% of annual compounded growth in revenue over the next three to five years. She credited “accelerating AI momentum.”

Superstar stocks benefiting from the artificial-intelligence frenzy have been shaky recently, as investors question whether they can add much more to their already spectacular gains. Nvidia, for example, came into the day with a 4.6% drop for the month so far after it more than doubled in four of the last five years.

Their sensational growth has been one of the top reasons the U.S. market has hit records despite a slowing job market and 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 dragged the S&P 500 down by nearly half.

Similar questions are also dogging the broad U.S. stock market, though other stocks don’t look as expensive as Big Tech and AI superstars.

One way for stock prices to look less expensive is for companies to deliver big growth in profits.

IBM rose 3.2% and was one of the biggest reasons for the Dow’s strong performance after announcing progress in “bringing truly useful quantum computing to the world,” according to Jay Gambetta, director of IBM Research. Companies across the industry are racing to develop quantum computing in order to solve complex problems beyond the reach of classical computers.

On Holdings jumped 25% after the shoe and apparel company reported a much bigger profit for the latest quarter than analysts expected.

But even beating expectations may not be enough for some stocks. Circle Internet Group fell 6.6% even though its profit for the latest quarter trounced analysts’ estimates.

The stock price of the U.S.-based issuer of one of the most popular cryptocurrencies has been generally falling since it got near $300 in June, just a few weeks after its initial price offering of $31.

Another way for stock prices to look less expensive is if interest rates fall because bonds paying lower yields usually encourage investors to pay higher prices for other investments.

In the U.S. bond market, where trading resumed following Tuesday’s Veterans Day holiday, the yield on the 10-year Treasury eased to 4.07% from 4.13% late Monday.

Traders still see a roughly two-in-three chance that the Federal Reserve will cut its main interest rate at its next meeting in December, according to data from CME Group. That’s despite Fed Chair Jerome Powell saying a third cut for the year to shore up the slowing job market is far from a sure thing. Fed officials are worried about the potential of giving still-high inflation more fuel.

In stock markets abroad, indexes rose across much of Europe and Asia.

France’s CAC 40 jumped 1.2%, and South Korea’s Kospi gained 1.1% for two of the world’s bigger gains.

AP Business Writers Yuri Kageyama and Matt Ott contributed.