Wall Street rises on AI stocks despite higher oil prices and bond yields

Wall Street’s major indexes edged higher on Friday as optimism around artificial intelligence supported investor sentiment despite rising oil prices and Treasury yields, while investors monitored efforts to reach an agreement to end the conflict in the Middle East.

The Dow Jones Industrial Average rose 226.73 points, or 0.44%, to 51,576.71, while the S&P 500 gained 22.49 points, or 0.29%, to 7,726.62. The Nasdaq Composite climbed 109.38 points, or 0.41%, to 27,048.75.

Eight of the 11 sectors in the S&P 500 traded lower, but a 1% gain in the technology sector offset those declines, putting the sector on track to be the best performer of the week.

Both the S&P 500 and the tech-heavy Nasdaq were heading for weekly gains.

Microsoft shares jumped 3%, providing the biggest boost to the S&P 500, after the software giant unveiled several new capabilities for its Copilot app, including a coding tool and an AI agent that operates continuously.

Chipmakers Micron and Marvell Technology gained around 1% each, while Nvidia edged slightly higher.

AI optimism has been one of the main drivers of the market this week, supported by Meta’s Muse and its integrated Charm device gaining traction among younger consumers. Some analysts said the momentum was beginning to demonstrate the payoff from massive spending on the technology. Meta shares fell 2.8%, giving back some of their gains from earlier in the week.

Market sentiment was also supported by a report that US and Iranian negotiators continued discussing a phased path out of the war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade.

Oil and inflation concerns limit stock gains

Optimism remained constrained, however, by inflation concerns stemming from the ongoing conflicts in Iran and Ukraine and elevated government debt levels. Brent crude hovered above $100 a barrel, while the 10-year US Treasury yield stood at 5.1%.

Traders now see a 64% probability that the Federal Reserve will raise interest rates by at least 25 basis points in October, up from around 50% earlier this week, according to the CME FedWatch Tool.

With the US-China summit taking center stage, US President Donald Trump said he had held a “very productive meeting” with Chinese President Xi Jinping. Trump also made clear to Xi that Chinese assistance to Iran was unacceptable, according to the US ambassador to China.

Akamai Technologies shares jumped 8% after the company signed an $11.6 billion agreement to provide cloud services to artificial intelligence company Anthropic.