Wall Street Steadies as Nvidia and AI Stocks Recover/ Newslooks/ WASHINGTON/ J. Mansour/ Wall Street stabilized Monday as Nvidia, AMD and other artificial intelligence stocks recovered some of last week’s steep losses. The S&P 500 gained 0.4% and the Nasdaq rose 0.7%, while the Dow slipped 87 points in morning trading. Oil remained near $88 per barrel as the Iran war restricted shipping through the Strait of Hormuz and kept US gasoline above $4 per gallon.
Quick Look
- The S&P 500 rose 0.4% Monday morning.
- The Nasdaq composite gained 0.7%.
- The Dow Jones Industrial Average fell 87 points, or 0.2%.
- Nvidia advanced 1.8% after weighing heavily on the market Friday.
- Sandisk jumped 5.6% after losing 29% the previous week.
- AMD rose 3.4% after expanding its artificial intelligence partnership with Microsoft.
- Alphabet is scheduled to report quarterly results Wednesday.
- AMC Entertainment surged 18% after beating revenue expectations.
- Domino’s Pizza gained 1.5% following stronger spring revenue.
- Jersey Mike’s began promoting an initial public offering priced between $21 and $25 per share.
- US gasoline prices climbed above an average of $4 per gallon.
- Brent crude traded at $88.21 after fluctuating between approximately $86 and $91.
- Strait of Hormuz vessel traffic fell nearly 50% from the previous week.
- The 10-year Treasury yield rose to 4.58%.
- South Korea’s Kospi sank 4.5%.
- Markets rose 2.4% in Hong Kong and 0.9% in Shanghai.
Deep Look
AI Stock Rebound Stabilizes Wall Street
NEW YORK — Wall Street steadied Monday as chipmakers and other leading beneficiaries of the artificial intelligence boom recovered some of their recent losses.
The S&P 500 rose 0.4% after completing its first losing week in three and only its third weekly decline since the end of March.
The Dow Jones Industrial Average was down 87 points, or 0.2%, as of 11:30 a.m. Eastern time.
The technology-heavy Nasdaq composite gained 0.7%.
The rebound came after weeks of volatility among AI-related companies, even as the major US indexes remained close to record levels.
Nvidia Recovers From Friday’s Decline
Nvidia rose 1.8% and provided one of the strongest boosts to the broader market.
The chipmaker had been the heaviest weight on the S&P 500 during Friday’s decline.
Nvidia’s rebound helped Wall Street recover a portion of the losses caused by concerns about elevated AI stock valuations and the sustainability of technology spending.
The company has benefited from enormous demand for the advanced processors used to build and operate artificial intelligence systems.
Sandisk Rebounds After 29% Weekly Loss
Sandisk climbed 5.6% Monday after falling 29% during the previous week.
The sharp rebound reflected the continuing volatility affecting semiconductor and memory companies.
Investors have become increasingly cautious about stocks whose prices surged during the AI boom.
Although customers are spending billions of dollars on chips and data centers, that demand could weaken if artificial intelligence fails to generate the profits and productivity gains companies have projected.
AMD Expands Microsoft Partnership
Advanced Micro Devices gained 3.4% after announcing an expanded partnership with Microsoft.
Under the agreement, Microsoft will use more AMD products for artificial intelligence applications.
The partnership will include AMD’s new Helios product beginning during the second half of the year.
The agreement provided support for AMD’s shares by offering evidence of continued demand for AI infrastructure from one of the technology industry’s largest companies.
Alphabet Earnings Could Test AI Optimism
Investors may receive more information about the strength of AI spending when several major technology companies report quarterly results.
Alphabet is scheduled to announce its spring financial performance Wednesday.
The Google parent company is also expected to provide updates about its artificial intelligence strategy, investments and products.
Wall Street will be watching for signs that the company’s spending is producing meaningful revenue and profit growth.
Companies Face Pressure to Deliver Growth
Businesses across the market face high expectations as quarterly earnings season continues.
Major indexes remain close to record highs despite the recent turbulence among AI shares.
Results or forecasts that fall short of expectations could cause sharp declines, even when companies report rising revenue or profits.
AMC Entertainment Jumps 18%
AMC Entertainment surged 18% after reporting quarterly revenue that exceeded analysts’ expectations.
The movie theater operator also highlighted strong demand for “The Odyssey.”
AMC said some theaters in Los Angeles and other cities screened the film for more than 85 consecutive hours from Thursday through Sunday.
The extended screenings helped cinemas accommodate audiences during the film’s opening period.
Domino’s Pizza Beats Revenue Forecast
Domino’s Pizza gained 1.5% after reporting stronger spring revenue than analysts had expected.
Chief Executive Russell Weiner said the company recorded growth in both delivery and carryout orders.
The improvement occurred even as the broader restaurant industry continued “to face pressure on consumer demand.”
Restaurants and other consumer-facing companies are competing for spending from households dealing with persistent inflation and higher fuel costs.
Jersey Mike’s Begins IPO Roadshow
Jersey Mike’s began its investor roadshow as the restaurant chain prepared for an initial public offering.
The company plans to sell shares on the New York Stock Exchange for between $21 and $25 each.
The roadshow allows company executives and advisers to present the business to potential investors before the stock begins publicly trading.
Market conditions and consumer demand will help determine the final offering price and investor interest.
Gasoline Returns Above $4 Per Gallon
US households continue to face financial pressure from high energy costs.
The national average price of regular gasoline has climbed back above $4 per gallon.
Gasoline prices have followed the recent increase in crude oil.
Brent crude fell below $72 per barrel earlier in July, returning close to the level recorded before the war with Iran began.
Prices have since rebounded sharply as fighting intensified and disrupted oil transportation through the Strait of Hormuz.
Brent Crude Trades Near $88
Brent crude fluctuated between approximately $86 and $91 per barrel Monday.
It was most recently trading at $88.21, an increase of 0.1%.
The war with Iran has prevented many oil tankers from using the Strait of Hormuz to transport crude from the Persian Gulf to customers around the world.
Reduced shipping has increased concerns about available supplies and placed upward pressure on prices.
Hormuz Traffic Falls Nearly 50%
S&P Global counted 127 vessels crossing the Strait of Hormuz during the week ending Sunday.
That represented a decline of nearly 50% from the previous week.
The strait is one of the world’s most important energy routes, making any sustained disruption a significant risk for oil markets and the global economy.
Higher crude prices can increase the cost of gasoline, transportation, manufacturing and consumer goods.
Treasury Yields Continue Rising
Concerns about costly oil and persistent inflation pushed Treasury yields higher.
The yield on the 10-year Treasury note increased to 4.58% from 4.55% late Friday.
The yield stood at 3.97% before the war with Iran began.
Higher Treasury yields can slow the economy by increasing borrowing costs for households and businesses.
They can also pressure stock prices by making bonds more attractive relative to equities.
The average 30-year mortgage rate has already reached its highest level in nearly a year.
Asian Markets Post Sharp Moves
European stock indexes were mixed Monday, while Asian markets recorded larger fluctuations.
South Korea’s Kospi fell 4.5%.
The index has been particularly vulnerable to the volatility surrounding artificial intelligence because Samsung Electronics and SK Hynix have heavy weightings in the South Korean market.
Chinese stocks strengthened, with Hong Kong’s main index rising 2.4% and Shanghai gaining 0.9%.
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