Wall Street Drifts as Global Rally Loses Steam/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks traded mostly flat after a powerful global rally that began in Asia lost momentum on Wall Street. Japan’s Nikkei surged to a record following election results, but U.S. markets paused near all-time highs. Investors weighed pricey valuations, AI spending risks, and upcoming jobs and inflation data.
US Stocks Drift After Global Rally Quick Looks
- S&P 500 little changed, hovering near record levels
- Dow slips modestly; Nasdaq edges higher
- Japan’s Nikkei hits a record after election landslide
- AI chipmakers Nvidia and Broadcom lift markets
- Kroger jumps after naming a new CEO
- Hims & Hers plunges after lawsuit from Novo Nordisk
- Treasury yields steady ahead of jobs and inflation reports
- Gold rebounds above $5,000; Bitcoin retreats from weekend highs
Deep Look: Wall Street Drifts as Global Rally Loses Steam
NEW YORK (AP) — A strong rally that swept through global markets early Monday lost momentum by the time trading reached Wall Street, leaving U.S. stocks drifting as investors paused near record highs to reassess valuations, economic risks, and the pace of artificial intelligence spending.
By midmorning, the S&P 500 was essentially flat, while the Dow Jones Industrial Average slipped about 0.3%. The Nasdaq Composite edged slightly higher, buoyed by gains in major technology names.
Asia Sparks the Rally
The day’s earlier surge came from Asia, where Japan’s Nikkei 225 jumped nearly 4% to a record high. Investors reacted positively to a landslide election victory for the prime minister’s party, which markets interpreted as strengthening the government’s ability to push through reforms aimed at boosting economic growth.
Other Asian markets followed suit. South Korea’s Kospi soared, while stocks also rose solidly in Hong Kong and Shanghai. By contrast, European markets showed mixed and more subdued trading, signaling waning enthusiasm as the rally moved west.
Wall Street Takes a Breather
U.S. stocks entered the week after their strongest single-day rally since May on Friday, leaving markets vulnerable to a pause. Despite Monday’s modest moves, the S&P 500 remains close to the all-time high it set last month, intensifying concerns that stock prices may have climbed too far, too fast.
Another lingering worry is whether massive investments in artificial intelligence will translate into enough profits to justify the spending. Those concerns have not stopped investors from continuing to favor companies at the heart of the AI boom.
AI Winners Support the Market
Chipmakers were among the strongest supports for the broader market. Nvidia climbed more than 3%, while Broadcom added roughly 1.5%. Their gains helped offset broader declines across much of the market, where more stocks fell than rose.
In company-specific moves, Kroger surged more than 8% after naming a former Walmart executive as its new chief executive officer.
Notable Losers and Movers
On the downside, Hims & Hers plunged nearly 27% after Novo Nordisk filed a lawsuit alleging the company was unlawfully selling versions of its weight-loss treatments. Novo Nordisk’s U.S.-listed shares rose sharply in response.
Workday slid after announcing that CEO Carl Eschenbach would step down, with co-founder Aneel Bhusri returning to the role. Offshore drilling firm Transocean dipped slightly after agreeing to acquire Valaris in a $5.8 billion all-stock deal, while Valaris shares soared.
Bonds, Rates, and the Fed
In the bond market, Treasury yields were little changed ahead of a busy week of economic data. The yield on the 10-year Treasury held steady around 4.22%.
Investors are closely watching upcoming reports on jobs and consumer inflation, which could influence expectations for the Federal Reserve. The Fed has paused interest rate cuts, but a weakening labor market could revive expectations for easing later this year. Sticky inflation, however, could keep rates higher for longer.
Commodities and Crypto
Gold rebounded sharply, rising more than 1% to climb back above $5,000 an ounce after weeks of wild swings. Silver posted even larger gains. Meanwhile, Bitcoin slipped back toward $69,000 after topping $71,000 over the weekend, underscoring ongoing volatility in digital assets.
The Bottom Line
Despite Monday’s pause, U.S. stocks remain near record highs, supported by optimism over eventual interest rate cuts and continued enthusiasm for AI-driven growth. Whether that momentum resumes may depend on the next round of economic data — and whether it confirms that the economy can slow inflation without stalling growth.
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