NEW YORK (AP) — Oil prices sank again Tuesday and pulled below $80 per barrel for the first time since early March, while the U.S. stock market drifted near its all-time highs in mixed trading.
The S&P 500 slipped 0.4% and pulled 1.1% below its record set earlier this month. More stocks rose than fell on Wall Street, and the Dow Jones Industrial Average climbed 391 points, or 0.8%, toward another record. But drops for some influential tech stocks had
the Nasdaq composite down 0.7%, with an hour remaining in trading.
Stocks that had benefited from the boom in artificial-intelligence technology weighed on the market following their vicious swings over the last couple weeks. They have been leading the market up and down amid worries that their stock prices shot too high, too quickly in the mania around AI. That’s taken a toll because chip companies and other AI winners have grown so big that they’ve become some of Wall Street’s most influential stocks.
Drops of 1.7% for Nvidia and 5.1% for Micron Technology were two of the heaviest weights pulling the S&P 500 lower.
Robinhood Markets fell 2% after the investing platform said in a regulatory filing that it’s laying off about 10% of its full-time employees, while Dave & Buster’s Entertainment sank 4.6% after reporting a weaker profit for the latest quarter than analysts expected.
On the winning side of Wall Street was SpaceX, which rose 8.8% toward a third straight gain since its debut on the U.S. stock market. It said it’s moving forward with a purchase of Cursor, a popular AI coding assistant, valuing it at $60 billion.
Yum Brands climbed 2% after it said it’s selling the Pizza Hut chain for $2.7 billion. Most of the restaurants will go to LongRange Capital, a private equity firm. Those in mainland China will go to Yum China Holdings.
The strongest action was in the oil market, where optimism continued that a tentative U.S.-Iran deal on their war will reopen the Strait of Hormuz at the end of the week and get the global flow of oil going again. The price for a barrel of Brent crude fell 5.1% to settle at $78.96.
Significant hurdles remain in the negotiations, including what to do with Iran’s nuclear program. But the hope on Wall Street is that this agreement will mean a long-term fix to a conflict that has worsened inflation around the world. The price of Brent has come down sharply from its $100-plus level of a few weeks ago, though it could still take months for the energy industry to get back to full speed.
In stock markets abroad, indexes rose in Europe following a mixed performance in Asia.
Tokyo’s Nikkei 225 briefly topped 70,000 for the first time before ending with a modest gain of 0.1% after the Bank of Japan raised its benchmark interest rate to 1%. That’s its highest level in three decades, and it followed a similar move by the European Central Bank last week.
The Federal Reserve is beginning its own meeting on what to do with interest rates Tuesday, with an announcement on the decision coming Wednesday.
It will be the first meeting under the Fed’s new chair, Kevin Warsh, who was nominated by President Donald Trump. Trump has been pushing for lower interest rates, which would give the economy a boost but also threaten to worsen inflation. The widespread expectation, though, is that the Fed will leave its main interest rate alone again.
In the bond market, the yield on the 10-year Treasury fell to 4.42% from 4.47% late Monday and from 4.56% earlier this month.
High yields in bond markets worldwide caused by expensive oil prices have threatened to slow economies and undercut prices for all kinds of investments, including stocks and cryptocurrencies. High yields have already sent mortgage rates higher, and a report on Tuesday said construction crews broke ground on far fewer new U.S. homes in May than economists expected.
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AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.
