A morning rally for US stocks petered out on Monday as the tech and AI industries remained shaky following their sell-off last week.
The S&P 500 sank 0.5% after erasing a gain that had reached 1.1% early in the day. The Dow Jones Industrial Average rose 213 points, or 0.4%, while the Nasdaq composite fell 1.1%.
The mixed performance for indexes came even though the majority of stocks within the S&P 500 climbed. They benefited from a 7.6% drop in the price of a barrel of Brent crude to $US104.77. It's the latest yo-yo move for oil prices amid uncertainty about when the war with Iran will allow the global industry to return to normal.
The price for the most actively traded contract in the Brent market has been veering between roughly $US70 and $US120 per barrel since just before the war with Iran began, and it's been quick to reverse direction.
AI stocks remain volatile
So have stocks in the artificial-intelligence industry, which have been shaky for months amid criticism that they surged too high and are in a bubble. Worries are growing that all the hundreds of billions of dollars Big Tech companies are pouring into AI data centres won't yield enough productivity and profit to make the investments worth it.
The latest profit reports from Alphabet and other Big Tech companies also showed how AI may be dragging on their own businesses. Not only did Google's parent company burn through more cash during the latest quarter, as measured by something called free cash flow, it also reported slower-than-expected growth in its search business, which raised worries about AI undercutting its cash cow. That caused Alphabet's stock to drop more than 12% on Thursday for its worst day on record.
On Monday, Alphabet initially rallied 2.6%, but it later erased the gain and then finished with a loss of 0.3%. Nvidia, meanwhile, went from an early gain of 2.6% to a drop of 1.3% following its 4.2% slide on Friday. Such swings dragged the rest of the market with them.
Oil prices ease back
Outside of AI and tech, the US market did much better, and nearly seven out of every 10 stocks in the S&P 500 index rose.
Monday's easing in oil prices helped also lift stocks of companies with big fuel bills. United Airlines flew 4.8% higher, Southwest Airlines climbed 3.6% and cruise operator Carnival rose 4.2%.
All told, the S&P 500 slipped 38.67 points to 7,541.40. The Dow Jones Industrial Average rose 213.67 points to 51,983.98, and the Nasdaq composite fell 272.68 points to 25,164.32.
What happened on global markets?
On global markets indexes rose in Europe. The swings were larger in Asia, where South Korea's Kospi jumped 2.2% on renewed strength for the tech giants that dominate its market.
In China, indexes rose 1.1% in Shanghai and 0.4% in Hong Kong to recover some of their steep recent losses. Stocks in Shanghai finished October more than 15% below a peak reached in May.
The People's Bank of China said on Monday that around 100 billion yuan would be deployed under a new program that could help support the market.
