AI stocks rebound
More gains for makers of computer chips and other winners of the artificial-intelligence boom carried Wall Street higher on Tuesday.
The S&P 500 climbed 0.9%. The Dow Jones Industrial Average added 385 points, or 0.7%, and the Nasdaq composite rose 1.3%.
AI stocks once again were at the centre of the action, and they rose for a second straight day after tumbling the week before.
After rocketing higher because of the boom in investment in AI chips and data centres, they’ve come under pressure in recent weeks on worries that they shot too high. Concerns are also weighing that investment in AI may fall off if it doesn’t produce as much profit and productivity as hoped.
Oil adds inflation pressure
The gains came despite more climbs for oil prices, and Brent crude oil briefly got near $US92 per barrel for the first time in more than five weeks because of continued attacks between the United States and Iran. It later pared its gain to 2% and settled at $US91.01. That’s up from less than $US72 early this month, which is roughly where it was before the war with Iran.
Rising oil prices are threatening a reacceleration of inflation, just as increases for prices were slowing more than economists expected. That in turn could push the Federal Reserve and other central banks to raise interest rates, which would slow economies and undercut prices for stocks and other investments.
The yield on the 10-year Treasury rose to 4.63% from 4.60% late Monday and from just 3.97% before the war with Iran began.
Earnings help offset concerns
On Wall Street, several stronger-than-expected profit reports from big US companies helped stocks to strengthen despite the added pressure.
Companies broadly are under pressure to deliver strong growth in profit and revenue because of how high their stock prices have shot. Indexes are near their records, even with the recent shakiness for AI stocks.
All told, the S&P 500 rose 65.92 points to 7,509.20. The Dow Jones Industrial Average gained 385.38 to 52,224.64, and the Nasdaq composite climbed 329.13 to 25,837.21.
