NEW YORK (AP) — Sinking technology stocks are dragging the U.S. market lower on Wednesday.
The S&P 500 fell 0.6% and was heading toward its eighth loss in the last 11 days. The Dow Jones Industrial Average was down 249 points, or 0.5%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.9% lower.
The heaviest weights on the market were stocks that had soared earlier in the euphoria around artificial-intelligence technology, including drops
of 3.2% for Nvidia, 7.5% for Micron Technology and 8% for Applied Materials. Such stocks have been zigzagging in recent weeks because of worries that they had become too expensive.
AI stocks have grown so big that they’ve become some of the most influential on Wall Street, and their drops helped drag the S&P 500 lower even though the majority of stocks within the index rose.
Among the winners was General Mills, which climbed 6.2% after the company behind the Cheerios and Progresso brands reported better results for the latest quarter than analysts expected. It also announced a plan to cut $3 billion in costs over four years.
Stocks meanwhile felt pressure from rising yields in the bond market, which make it more expensive for businesses and households to borrow money and in turn can slow the economy. Higher yields also tend to undercut prices for stocks and other investments.
The yield on the 10-year Treasury rose to 4.48% from 4.44% late Tuesday and from 4.38% the day before. Yields have been on the rise since the war with Iran began because of worries about high inflation caused by expensive oil. The concern is that the Federal Reserve may have to hike interest rates several times this year to keep a lid on inflation.
When Treasurys are paying more in interest, investors become less willing to pay high prices for things seen as riskier bets. Gold, for example, pays its holders nothing. And rising yields briefly knocked its price below $3,980 per ounce overnight before it bounced back to $4,055.20. Earlier this year, it was fetching more than $5,300 per ounce.
For their part, oil prices eased Wednesday as hope remains that the United States and Iran may ultimately end their war and reopen the Strait of Hormuz to oil tankers delivering crude. The price for a barrel of Brent crude, the international standard, fell 1.5% to $71.82.
On Wall Street, Kroger sank 1.3% after the grocer said it agreed to buy Giant Eagle for $1.25 billion in cash. It will also take on $400 million in liabilities to buy the food and pharmacy retailer with stores stretching from Indiana to Maryland.
Nike slipped 1.4% even though it reported a stronger profit for the latest quarter than analysts expected. The athletic-gear giant is in the midst of a turnaround attempt by CEO Elliott Hill, and he said it’s still facing headwinds dragging on its revenue.
In stock markets abroad, indexes slipped in Europe following a mixed finish in Asia.
South Korea’s Kospi fell 2% for one of the world’s biggest moves. It’s been one of the world’s brightest stars thanks to euphoria around SK Hynix and other stocks in the artificial-intelligence industry, and the index is still up 97% for the year so far.
In Tokyo, the Nikkei 225 rose 0.6% after the Japanese yen fell to a 40-year low against the U.S. dollar.
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AP Business Writer Yuri Kageyama contributed to this report.
