NEW YORK (AP) — After rallying in the morning, the U.S. stock market weakened through the day on Monday and then turned lower as the tech and AI industries remain shaky following their sell-off last week.
The S&P 500 dropped 0.3% after rising as much as 1.1% during the morning. The Dow Jones Industrial Average was up 288 points, or 0.6%, as of 2:50 p.m. Eastern time, while the Nasdaq composite was down 0.8%.
The mixed performance came even though the
wide majority of stocks on Wall Street were climbing. They benefited from a 7.5% drop for the price of a barrel of Brent crude to $104.98. It's the latest yo-yo move for oil prices on uncertainty about when the war with Iran will allow the global industry to return to normal.
The price for the most actively traded contract in the Brent market has been veering between roughly $70 before the war with Iran began and $120 per barrel in March, and it’s been quick to reverse direction.
So have stocks in the artificial-intelligence industry, which have been shaky for months amid criticism that they surged too high and are in a bubble. Worries are growing that all the hundreds of billions of dollars Big Tech companies are pouring into AI data centers won’t yield enough productivity and profit to make the investments worth it.
The latest profit reports from Alphabet and other Big Tech companies also showed how AI may be dragging on their own businesses. Not only did Google’s parent company burn through more cash during the latest quarter, as measured by something called free cash flow, it also reported slower-than-expected growth in its search business, which raised worries about AI cannibalizing its cash cow. That caused Alphabet's stock to drop more than 12% Thursday for its worst day on record.
Alphabet initially rallied 2.6% Monday, but it later pared the gain and was most recently up 0.5%. Nvidia, meanwhile, went from an early gain of 2.6% to a drop of 0.8% following its 4.2% slide on Friday.
Apple was the single heaviest weight on the S&P 500 and fell 2% ahead of its profit report, which is scheduled to arrive after trading ends for the day.
Adding to the weakness in tech was Marvell Technology, which dropped 13% drop after saying it would buy Lumentum. Marvell said it will give 4.5 of its shares for each share of Lumentum, which sells lasers and other products that power the networks and infrastructure behind AI and cloud computing. Lumentum’s shares dropped 17.6%.
Outside of AI and tech, stocks did much better.
Monday’s drop in oil prices helped launch stocks of companies with big fuel bills. United Airlines flew 4.1% higher, Southwest Airlines climbed 2.9% and cruise operator Carnival rose 3.5%.
Marriott International rallied 3.9% after reporting strength for its hotels around the world. Even in the Middle East, where the war has affected its business, CEO Anthony Capuano said that “trends improved meaningfully” from the spring.
Idexx Laboratories leaped 20.4% after likewise delivering stronger profit and revenue for the latest quarter than analysts expected. The company, which sells diagnostic equipment and other products to veterinarians, also raised its forecasts for revenue and profit for the full year of 2026.
Expectations are high for all kinds of companies to continue to deliver big gains in profits as the U.S. economy keeps chugging along, even with high inflation and interest rates. A report on Monday said that growth for U.S. manufacturing was better last month than economists expected. Perhaps just as importantly, a measure of inflation in the survey by the Institute for Supply Management showed prices were rising at a slower pace.
In stock markets abroad, indexes rose in Europe. The swings were larger in Asia, where South Korea’s Kospi jumped 2.2% on renewed strength for the tech giants that dominate its market.
In China, indexes rose 1.1% in Shanghai and 0.4% in Hong Kong to recover some of their steep recent losses. Stocks in Shanghai finished October more than 15% below a peak reached in May.
The People’s Bank of China said Monday that around 100 billion yuan ($15 billion) would be deployed under a new program that could help support the market. ___
AP Business Writers Chan Ho-him and Michelle Chapman contributed to this report.
