AI stocks pull Wall Street further from its record as bond yields keep rising
NEW YORK (AP) — Wall Street is pulling further from its all-time high as AI stocks get back to sinking. The S&P 500 fell 0.6% Tuesday and is on track for a third straight modest loss since setting its all-time high on Thursday. The Dow Jones Industrial Average dipped 156 points, and the Nasdaq composite sank 1.2%. Most stocks in the S&P 500 actually rose, but losses for those like Nvidia and Micron Technology outweighed them. They’re facing criticism that their prices shot too high, and rising yields in the bond market cranked up the pressure further. Yields continued to climb in bond markets worldwide.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
TOKYO (AP) — Global shares were mostly lower on Tuesday, as rising oil prices and worries about inflation countered the boost to sentiment from robust corporate earnings reports.
France’s CAC 40 slipped 0.5% in early trading to 8,533.66, while the German DAX fell 0.5% to 26,198.88. Britain’s FTSE 100 was little changed, inching down less than 0.1% to 10,710.12.
The future for the S&P 500 fell 0.5%, while that for the Dow Jones Industrial Average lost 0.1%.
In Asia, Japan’s benchmark Nikkei 225 sank 2.5% to finish at 67,460.73.
South Korea’s Kospi lost 1.6% to 6,869.83. The index has been sliding recently as investors have sold shares in the local market and invested in U.S. stocks to escape wild swings in the Kospi linked to the boom in artificial intelligence, analysts said.
Australia’s S&P/ASX 200 was little changed, inching down less than 0.1% to 9,070.00.
Hong Kong’s Hang Seng gained nearly 0.1% to 25,471.15, while the Shanghai Composite added 0.2% to 3,990.30.
Analysts said robust earnings reports in Asia and the U.S., partly tied to AI, have helped to counter worries about what the war in Iran will do to the global flow of crude oil and its impact on energy prices. Japan, for one, imports almost all its oil.
“First, the beneficiary base from AI investment has broadened. Demand spread across a wide range of industries, including semiconductor production equipment, power equipment, machinery, electronic components, and materials. AI demand effectively helped rediscover globally competitive companies across these sectors,” Masashi Akutsu and Tetsuhiro Tokuyama said in a recent report for BofA Securities.
Oil prices have crept higher after a brief respite last month driven by hopes for an end to the war with Iran.
The 60-day deadline for an agreement to end the Iran war and resolve the dispute over its nuclear program is expiring. An interim agreement reached in June has collapsed, and Washington and Tehran are even further apart than they were then.
Last month alone, Brent crude, the international standard, zigzagged between $72 and $102 as hopes rose and fell that the United States and Iran could reach a deal that would allow oil tankers to freely exit the Persian Gulf again.
Early Tuesday, the price for a barrel of Brent crude rose 0.1% to $90.94 a barrel. It gained 2.7% on Monday.
Benchmark U.S. crude rose 0.6% to $84.99 a barrel.
Rising oil prices have been a major factor behind stubbornly high inflation.
In currency trading early Tuesday, the U.S. dollar rose to 159.68 Japanese yen from 159.46 yen. The euro cost $1.1576, down from $1.1583.
