NEW YORK (AP) — Wall Street is swinging back upward on Monday, as the roller-coaster ride for stocks of chipmakers and other winners of the artificial-intelligence boom snaps higher.
The S&P 500 rose 0.6%, coming off its first losing week in the last three
and just its third since the end of March. The Dow Jones Industrial Average was up 122 points, or 0.2%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1% higher.Nvidia added 1.9% and
helped the market recover some of its losses, swinging back upward after serving as the heaviest weight on the S&P 500 Friday. Sandisk climbed 6.7% after tumbling 29% last week.
Such stocks have been under pressure for weeks on worries that their prices shot too high in the euphoria around AI. On one hand, companies are making billions of dollars in revenue as customers pour money into AI chips and data centers. But all that spending may fizzle out if AI doesn’t produce as much profit and productivity as promised.
Wall Street may get some hints on that soon as some of the biggest spenders on AI report their latest quarterly results. On Wednesday, Alphabet will tell investors how much it made during the spring and give updates on its AI efforts.
All kinds of companies, including outside of tech, are under pressure to report strong growth in profit for the spring. They will need to in order to justify the big moves their stock prices have made. Indexes are near their records, even with the recent shakiness because for AI stocks.
AMC Entertainment rose 11.6% after the movie-theater operator reported stronger revenue for the latest quarter than analysts expected. It also said that some of its theaters in Los Angeles and other cities ran “The Odyssey” for more than 85 straight hours from Thursday through Sunday to meet demand.
Domino’s Pizza climbed 4.2% after delivering stronger revenue for the spring than expected. CEO Russell Weiner said the company saw growth in orders for both its carryout and delivery businesses, even with the broad industry continuing “to face pressure on consumer demand.”
Much of that pressure is coming from still-high inflation, thanks in large part to high gasoline prices. Inflation last month was not as bad as economists expected, but it could be set to reaccelerate if oil prices keep rising.
The price for a barrel of Brent crude oil had dropped below $72 early this month, roughly back to where it was before the war with Iran began. But it’s been jumping as fighting continues in the Middle East.
On Monday, the price swung sharply between roughly $86 and $91. It was most recently at $87.76, down 0.4%.
Worries about expensive oil and high inflation have sent Treasury yields higher in the bond market, which threaten to slow the economy and undercut prices for stocks and other investments.
The yield on the 10-year Treasury ticked up to 4.56% from 4.55% late Friday and from just 3.97% before the war with Iran. Higher yields have already sent the average 30-year mortgage rate to its highest level in nearly a year.
In stock markets abroad, indexes ticked lower in Europe.
The moves were sharper in Asia, where South Korea’s Kospi fell 4.5%. It’s been at the center of the huge swings for AI stocks because it’s dominated by two tech companies, Samsung Electronics and SK Hynix.
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AP Business Writers Chan Ho-him and Matt Ott contributed to this report.
