Wall Street's record-breaking rally slows as Alphabet drags on the market

Analysts have said the market may be set for a slowdown following an unrelenting streak of nine straight winning weeks for the S&P 500, its longest since 2023. The rally has built with strong profit reports from U.S. companies, as well as hopes that the United States and Iran will reach a deal to reopen the Strait of Hormuz. That would allow oil to flow freely again from the Persian Gulf and hopefully lower its price.

One of the heaviest weights on the U.S. stock market was the parent company of Google, which fell 2.7% after saying it is raising $80 billion in cash by selling its stock. Alphabet said it plans to use some of that cash to pay for its huge investments in artificial-intelligence technology.

It’s planning to spend as much as $190 billion on equipment and other investments this year. That's more than all the stock of The Walt Disney Co., Boeing or AT&T is worth, and Alphabet is forecasting spending next year “to significantly increase.”

Such huge sums raise the question about whether AI can produce the profits and productivity necessary to make all the investment worth it. Critics have already been talking about the possibility of a bubble in AI investment.

In the meantime, the companies selling the shovels and picks in Wall Street’s latest gold rush continue to benefit.

Hewlett Packard Enterprise soared 25% after reporting a profit for the latest quarter that blew past analysts’ expectations. It credited demand from customers building their AI capabilities.

Generac climbed 5.8% after saying it signed a deal to provide backup power generators to an unnamed “leading hyperscale data center operator.”

Chip companies also continued to rally. Nvidia rose 2.6%, and Broadcom added 4.5%.

Marvell Technology leaped 24.2% after Nvidia’s CEO, Jensen Huang, suggested at a conference in Taiwan that Marvell could be “the next trillion-dollar company.” The latest to join the growing club of companies worth $1 trillion was Micron Technology, which is also riding the AI wave.

In the oil market, prices were calmer following Monday’s bounce back. Brent crude oil, the international standard, edged down by less than 0.1% to $94.96 per barrel, though that’s still well above the roughly $70 level it was at before the war.

In the bond market, Treasury yields were relatively steady.

The yield on the 10-year Treasury slipped to 4.45% from 4.47% late Monday. It briefly jumped after a report said that U.S. employers were advertising many more jobs at the end of April than economists expected, a potential signal of continued health for the U.S. labor market. But it quickly pulled back to where it was just before the report's release.

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

Hong Kong’s Hang Seng jumped 2.5% for one of the world’s biggest moves.

AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.