Alphabet and AI stocks nudge Wall Street to more records
[July 25, 2025] By
STAN CHOE
NEW YORK (AP) — Wall Street inched to more records on Thursday as gains
for Alphabet and artificial-intelligence stocks helped make up for Tesla
’s steep tumble.
The S&P 500 added 0.1% to its all-time high set the day before. The Dow
Jones Industrial Average fell 316 points, or 0.7%, while the Nasdaq
composite rose 0.2% to its own record.
Alphabet climbed 1% after the company behind Google and YouTube
delivered a fatter profit for the latest quarter than analysts expected.
It’s leaning more into artificial-intelligence technology and said it’s
increasing its budget to spend on AI chips and other investments this
year by $10 billion to $85 billion.
That helped push up other stocks in the AI industry, including a 1.7%
rise for Nvidia. The chip company was the strongest single force lifting
the S&P 500 because it’s the largest on Wall Street in terms of value.
But an 8.2% drop for Tesla kept the market in check. Elon Musk’s
electric-vehicle company reported results for the spring that were
roughly in line with or above analysts’ expectations, and Musk is trying
to highlight Tesla’s moves into AI and robotaxis.
The focus, though, remains on how Musk’s foray into politics is turning
off potential customers, and he said several rough quarters may be ahead
as “we’re in this weird transition period where we’ll lose a lot of
incentives in the U.S.”
Stocks have broadly been rallying for weeks on hopes that President
Donald Trump will reach trade deals with other countries that will lower
his stiff proposed tariffs, along with the risk that they could cause a
recession and drive up inflation. The record-setting gains have been so
strong that criticism is rising about how expensive stock prices have
become. That in turn puts pressure on companies to deliver solid growth
in profits in order to justify their gains.
Chipotle Mexican Grill also helped weigh on the market despite
delivering a profit for the spring that topped analysts’ expectations.
The restaurant chain’s growth in revenue came up short of expectations,
and its stock fell 13.3%.
IBM dropped 7.6% even though it likewise reported a stronger profit than
expected. Analysts pointed to slowing growth in its software business,
among other things underneath the surface.
American Airlines lost 9.6% despite reporting a stronger profit than
expected. The company said it expects to report a loss for the summer
quarter. It also gave a forecast for full-year results that had a wide
range: between a loss of 20 cents per share and a profit of 80 cents per
share, depending on how the economy performs.
Reactions in the stock market have generally been stronger than usual
when companies beat or miss their profit targets by a wide margin,
according to Julian Emanuel at Evercore.
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Trader John Gorman works on the floor of the New York Stock
Exchange, Monday, July 21, 2025. (AP Photo/Richard Drew)
 Other extreme moves have also been
roaring underneath the market’s surface, including huge swings for
“meme stocks.” Those are stocks where traders are looking to jump in
amid online cheerleading and ride it higher, before a halt in
momentum leaves some investors holding the bag.
Opendoor Technologies rose 5.7% following a manic stretch where it
swung by at least 10%, up or down, in 10 straight days.
Such swings, though, haven’t been showing up in overall market
indexes, which have been gliding recently. The S&P 500 hasn’t had a
day where it moved by at least 1% in a month.
All told, the S&P 500 rose 4.44 points to 6,363.35. The Dow Jones
Industrial Average fell 316.38 to 44,693.91, and the Nasdaq
composite rose 37.94 to 21,057.96.
In the bond market, Treasury yields held relatively steady following
the latest signals that the U.S. economy seems to be holding up OK
despite pressures from tariffs and elsewhere.
One report said that fewer U.S. workers applied for unemployment
benefits last week, a potential signal of easing layoffs. A separate
report from S&P Global suggested growth in U.S. business activity
accelerated in July, and the preliminary results easily topped
economists’ expectations.
That helped solidify expectations on Wall Street that the Federal
Reserve will hold interest rates steady at its next meeting next
week, even though Trump has been agitating angrily for cuts. The
European Central Bank, which had earlier been cutting its rates,
also held steady on Thursday as it waits to see how Trump’s tariffs
affect the economy.
The yield on the 10-year U.S. Treasury note briefly approached 4.44%
in the morning before pulling back to 4.40%, where it was late
Wednesday.
In stock markets abroad, indexes rose across much of Asia and
Europe. Tokyo’s jump of 1.6% and London’s rise of 0.8% were two of
the bigger gains.
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AP Writer Teresa Cerojano contributed.
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