U.S. stock indices mounted a strong rally on Thursday, led by better-than-expected corporate earnings. Despite persistent turbulence across the artificial intelligence sector over the long-term sustainability of the AI boom, major benchmarks continue to trade near all-time high levels.
The S&P 500 gained 0.3%, reversing early-session losses to hover near its record highs set last week. The Dow Jones Industrial Average surged by 556 points (1.1%), while the Nasdaq Composite edged up 0.1%.
Professional services giant Marsh led gainers with a 4.6% advance following a brand update and summer earnings that topped analyst forecasts.
As earnings season gets underway, lofty corporate profit expectations continue to anchor investor optimism, providing a key catalyst for equity markets despite elevated inflation and persistent Wall Street headwinds.
Corporate Earnings Spark Early Market Momentum
Several notable single-stock movements highlighted the strength of corporate fundamentals outside the tech space:
- Kimberly-Clark: Advanced 4.7% after raising its quarterly revenue and earnings guidance above market expectations across its personal care and consumer brands.
- BNY: Rose 3.2% following top-line and bottom-line earnings beats, with leadership noting robust operational performance across all geographic regions.
AI Volatility and Bond Yield Pressures
The trading session opened under pressure following a wave of global tech selling that originated in U.S. markets a day earlier. Overseas markets felt the brunt of the initial fallout, with the KOSPI plunging 7.6%—its sharpest single-day decline since July, leaving the chip-heavy South Korean index down 39% from its all-time peak in June. Japan’s Nikkei 225 also declined 4.9%.
The tech slide reflects broader market anxieties over high capital expenditures and rising borrowing costs:
The Cost of the AI Boom: Tech firms have spent aggressively on data center infrastructure and advanced chips. With global bond yields holding near multi-year highs, elevated borrowing costs are forcing investors to re-evaluate sky-high valuations, particularly for companies that borrowed heavily to fund hardware expansion.
Market heavyweight Nvidia fell 1.8%, acting as the main drag on the S&P 500, though the stock has still logged an extraordinary gain of nearly 1,415% since late 2022. Late-session buying helped limit earlier losses across the tech sector:
- Nvidia: Recovered more than half its intraday decline after falling 3.8% early in the session.
- TSMC (U.S.-listed shares): Trimmed losses to close down 1.8% after falling as much as 5.3% in early trading. Management reported record quarterly earnings and signaled that robust demand is projected to persist through the final quarter of 2026.
- CoreWeave: Bounced back dramatically to gain 5.9%, reversing an initial intraday drop of 9.5% that followed a severe 15.5% plunge in the prior session.
Closing Market Snapshot
| Index | Closing Level | Point Change | Percentage Change |
| S&P 500 | 7,744.06 | +25.12 | +0.3% |
| Dow Jones | 52,177.69 | +556.21 | +1.1% |
| Nasdaq Composite | 26,713.03 | +20.16 | +0.1% |
Bond Markets and Macroeconomic Indicators
U.S. Treasury yields eased, signaling increased investor demand for sovereign debt. The 10-year Treasury yield dropped to 5.09% from 5.19% late Wednesday, pulling back from multi-year highs above 5.30% recorded earlier in the month—levels not seen since 2002.
The decline in bond yields occurred despite fresh economic reports showing stickier-than-expected inflation metrics alongside resilient economic data, including stronger retail sales performance and lower-than-projected weekly jobless claims.
In European trading, less tech-heavy equity markets delivered solid performance, with London’s FTSE 100 gaining 1.1% to lead global regional gains.
💬 What’s Your Take?
Are current earnings enough to keep pushing markets to new highs, or are rising borrowing costs and high AI valuations bound to trigger a deeper pullback?