New York stocks attempt record highs on strong earnings and rate-cut hopes

Gold falls below $4,000, bonds also decline

Strong earnings send PayPal, UPS, Wayfair surging

Expectations around artificial intelligence (AI), solid corporate earnings and hopes for rate cuts led U.S. markets to open higher on the 28th (local time), once again attempting to break record highs.

Shortly after the open, the S&P 500 was up 0.1% and trading around the 6,900-point level. The Nasdaq rose 0.4% and the Dow Jones Industrial Average also gained 0.4%. As of about 10:10 a.m. EST, this upward trend continued.

Gold fell further, dropping below $4,000 per troy ounce, while bonds saw yields rise and prices fall despite expectations of rate cuts. Bond prices and yields move in opposite directions.

The 10-year Treasury yield rose 2 basis points (1bp=0.01%) to 3.99%, and the 2-year yield, which is more sensitive to policy, also climbed 2bp to 3.51%.

With demand related to India’s festival season easing — a major force in the gold market — gold continued its decline. Spot gold fell 1.4% to $3,925.40 an ounce.

Microsoft rose 2.5% on the day as it finalized a new partnership deal with OpenAI. Under the new agreement, Microsoft will secure a 27% stake in a deal worth about $135 billion. Microsoft will also have access to the AI startup’s technology through 2032.

NVIDIA, which is holding the AI conference GTC starting today, was trading up 1% at $193.

PayPal jumped more than 10% after raising its annual outlook and announcing a partnership with OpenAI to embed its digital wallet into ChatGPT.

UPS rose nearly 7% after reporting results that beat expectations thanks to large cost cuts and restructuring.

UnitedHealth Group beat Wall Street expectations in third-quarter results and also raised its annual earnings outlook.

Wayfair, an online home goods company that had been expected to face difficulties from tariffs, jumped 20% after reporting results that exceeded expectations.

Clark Bellin of Bellwether Wealth said, "AI profitability remains uncertain, but given the relentless demand for AI technology and infrastructure, strong earnings announcements from large-cap stocks are expected."

The Federal Reserve’s Federal Open Market Committee (FOMC) begins its meeting today. The Fed is expected to cut rates by 0.25% points this month. Expectations remain high for a Thursday meeting between President Trump and Chinese President Xi Jinping.

Paul Stanley of Granite Bay Wealth Management said, "From Fed rate cuts to eased U.S.-China trade tensions and strong corporate earnings, the stock market is getting everything it wants." Therefore, "there is a reason for this stock surge."

The Magnificent Seven companies have extended their gains to 280% as of yesterday since the AI boom began in November 2022.

Guest reporter Jeong-A Kim kja@hankyung.com