NEW YORK — The U.S. stock market is climbing Tuesday as artificial-intelligence stocks regain more of their sudden and sharp losses from last week, while oil prices ease.
The S&P 500 rose 0.6 per cent and pulled back within two per cent of its all-time high set a week ago. The Dow Jones Industrial Average was up 291 points, or 0.6 per cent, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.8 per cent higher.
Companies selling computer chips, memory and other building blocks of the AI boom again helped lead the market.
Micron Technology rose 2.5 per cent, for example, a day after jumping 9.9 per cent and two days after plunging 13.3 per cent. The computer memory company’s stock has already tripled so far this year, raising criticism that it’s gone too far, too fast.
Following last week’s industrywide sell-off, where the S&P 500 slumped Friday to its worst decline since October, the question is whether AI stocks are heading for a long downturn or just needed a shake-out to get rid of excessive optimism.
Wall Street, meanwhile, got some relief from falling oil prices. The price for a barrel of Brent crude oil fell 2.4 per cent to US$92.00 after briefly topping $98 the day before.
Prices have swung up and down as hopes fade and rise that the United States and Iran can reach a deal to reopen the Strait of Hormuz. That would allow oil tankers to resume delivering crude from the Persian Gulf to customers.
The drop in oil prices helped stocks of airlines, which have been punished by soaring fuel costs. U.S. airlines spent more than $6 billion on jet fuel in April, up 78 per cent from a year earlier, according to government data. United Airlines rose 2.7 per cent, and Delta Air Lines climbed 2.6 per cent.
To make up for their higher fuel bills, airlines have been raising their own airfares. It’s part of the broad, painful acceleration of inflation hitting U.S. shoppers because of the war with Iran. The high oil prices are also pushing up bond yields worldwide, raising the pressure on stock prices.
Treasury yields eased a bit Tuesday after the fade in oil prices. The yield on the 10-year Treasury dipped to 4.53 per cent from 4.56 per cent late Monday. But it’s still above its 3.97 per cent level from just before the war with Iran.
The latest monthly updates on U.S. inflation will arrive later in the week, with one on consumer prices coming Wednesday and one on wholesale prices coming Thursday.
Inflation is high enough, and the U.S. job market looks strong enough, that traders on Wall Street largely expect the U.S. Federal Reserve will have to raise interest rates by the end of this year. Higher interest rates would help keep a lid on inflation, but they would also threaten to slow economies and undercut prices for stocks and all kinds of other investments.
In stock markets abroad, indexes mostly ticked higher in Europe following bigger moves in Asia.
South Korea’s Kospi jumped 8.2 per cent and nearly recovered Monday’s plunge of 8.3 per cent. It’s been beholden to the performance of big tech stocks like SK Hynix and Samsung Electronics.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed to this report.
By Stan Choe
