U.S. Financial markets are poised to open with strong gains Thursday following another sell-off of artificial-intelligence stocks that dragged the sector sharply lower.
Futures for the S&P 500 rose 0.8% after the first back-to-back session losses in three weeks. Futures for the Dow Jones Industrial Average gained 0.7% before the opening bell, while Nasdaq futures slipped 1%.
AI-related stocks continued to swing back-and-forth as chipmakers took back some
of the losses suffered in recent days.
Micron Technology rose 3% overnight following Wednesday's loss of 4.7%. The Idaho chipmaker is coming off a wild stretch where it sank 7.7% last Thursday, then plunged another 13.3% Friday then rallied 9.9% Monday.
A bevy of chip-related stocks — including Intel, Teradyne, Lam Research and Applied Materials — all jumped about 4% in off-hours trading.
Wall Street has been shaky since last week, when AI stocks went from roaring to records to suddenly turn lower. Among the worries is that their prices may have shot too high, too fast because of AI mania. The question now is whether the break lower has cleared out excessive optimism that may have built into their stock prices, or if it’s the start of a longer downturn.
Some of the pressure on AI stocks could also be coming from investors pulling cash out to prepare for high-profile debuts on the U.S. stock market for several AI giants. SpaceX’s initial public offering could come later this week, for example.
Oil prices retreated modestly after rising earlier as the U.S. launched a second round of airstrikes against Iran.
The war in the Middle East has been keeping the Strait of Hormuz effectively shut to oil tankers, which has prevented the delivery of crude from the Persian Gulf to customers worldwide.
Brent crude oil, the international standard, fell 90 cents to $92.20 per barrel early Thursday. It was at around $70 a barrel before the start of the war in late February.
U.S. benchmark crude oil was down 82 cents at $89.21 a barrel.
High oil prices have sent inflation higher, and a report on Wednesday showed that prices for U.S. consumers jumped in May at the highest speed in three years.
Traders are betting the Federal Reserve will have to hike its main interest rate at least once this year, given price pressures and the strength of the U.S. job market.
High yields can slow entire economies and undercut prices for all kinds of investments, including stocks and cryptocurrencies. They hit investments seen as the most expensive in particular, and some critics are calling AI a bubble where investment inflated too far.
At midday in Europe, Germany’s DAX ticked up 0.2%, the CAC 40 in Paris gained 0.8% and the FTSE 100 in London added 0.9%.
In Asia, Tokyo's Nikkei 225 edged up less than 0.1% to 64,217.27 after falling earlier in the day, while the Kospi in South Korea gained 0.4% to 7,763.95.
Hong Kong's Hang Seng fell 0.7% to 24,249.29, while the Shanghai Composite index was down 0.2% to 3,987.01.
In Australia, the S&P/ASX 200 likewise shed 0.2% to 8,633.20.
Taiwan's Taiex slipped 0.2% and India's Sensex rose 0.2%.
