New York, Jul 24 (AP) Wall Street is hanging near its records on Thursday, but the calm surface of the US stock market is hiding some roiling moves underneath. Alphabet is rallying, and Tesla is sinking sharply following a jumble of profit reports from big US companies.

The S&P 500 was 0.1 per cent higher in early trading after setting an all-time high the day before. The Dow Jones Industrial Average was down 265 points, or 0.6 per cent, as of 9:35 am. Eastern time, and the Nasdaq composite was 0.3 per cent higher.

Alphabet climbed 3.1 per cent 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 USD 10 billion to USD 85 billion.

That helped drive up other stocks in the AI industry, including a 1.4 USD gain for chip company Broadcom.

But a 9.2 per cent drop for Tesla helped keep 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 US” 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 profit growth in order to justify their big gains.

Besides Tesla, airlines also helped weigh on the market following their profit reports.

American Airlines lost 9.3 per cent despite reporting a stronger profit than expected, thanks in part to premium bookings on long-haul flights abroad. The company said it expects to report a loss for the summer quarter. It also gave a forecast for results for the full year 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.

Southwest Airlines lost 8.9 per cent after delivering weaker results than expected. But it also said that it's seeing early signs of stronger demand coming off a “depressed second quarter.” 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. Other extreme moves have also been happening underneath the market's surface, including huge swings for “meme stocks.” Those are stocks where traders are looking to jump in with others driven by online cheerleading and get out before the momentum stops.

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 swung by at least 1 per cent in a month.

In the bond market, Treasury yields rose following the latest signal that the US economy seems to be holding up OK despite all the pressures on it from tariffs and elsewhere. A report said that fewer US workers applied for unemployment benefits last week, a potential signal of easing layoffs.

That helped nearly cement 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 been cutting its rates, also held steady on Thursday as it waits to see how Trump's tariffs will affect the economy.

The yield on the 10-year US Treasury note rose to 4.43 per cent from 4.40 per cent late Wednesday.

In stock markets abroad, indexes rose across much of Asia and Europe. Tokyo's jump of 1.6 per cent and London's rise of 0.8 per cent were two of the bigger gains. (AP) RD RD

Market volatility driven by tech-led earnings, political risk, and bond-market signals keeps indexes near records. US markets traded near record levels while sector divergence intensified: Alphabet rose on stronger profits and expanded AI spending, Tesla dropped amid mixed results and political backlash affecting demand, and airlines fell after uneven reports. Rising Treasury yields and labor data reinforced expectations of steady interest rates, and hopes for trade easing supported equity gains even as high valuations and episodic swings in individual stocks kept market volatility elevated.