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Financial Markets 07/06 09:31
A rebound for AI stocks is helping to support Wall Street and keep indexes
mixed on Monday.
NEW YORK (AP) -- A rebound for AI stocks is helping to support Wall Street
and keep indexes mixed on Monday.
The S&P 500 rose 0.5%, even though the majority of stocks within the index
fell. The strength for companies in the artificial-intelligence technology
industry had the Nasdaq composite 1.1% higher, as of 9:35 a.m. Eastern time,
but the Dow Jones Industrial Average was down 160 points, or 0.3%.
AI stocks have been swinging sharply in recent weeks on worries that their
prices shot too high in the euphoria around AI. Doubts are rising about whether
all the dollars flowing into AI chips and data centers can possibly create
enough productivity and profit gains to make back all the investments.
Broadcom rose 5.3% and was one of the strongest forces lifting the S&P 500,
coming off losses of more than 2% from both Wednesday and Thursday at the end
of last week, before the holiday for the Fourth of July. Micron Technology
climbed 4.2%.
The global appetite for AI from investors will face an additional test later
this week when SK Hynix, the South Korean maker of computer memory, plans to
raise $28 billion by selling shares of stock that will trade in the United
States on the Nasdaq. That would make it one of the biggest U.S. offerings
ever, behind SpaceX's IPO from last month, which raised $75 billion.
SK Hynix's stock in Seoul has already more than tripled so far this year
because of the AI boom, but its day-to-day swings have included sharp losses in
recent weeks. It fell 14.6% on Thursday alone, for example.
SpaceX, which owns the xAI business, has seen its stock likewise swing
following its ballyhooed initial public offering. It rose 1.2% in the last day
of trading before it's scheduled to join the Nasdaq 100 index of the largest
non-financial stocks on the Nasdaq. That inclusion will force funds like the
QQQ exchange-traded fund, which mimic the index, to buy SpaceX themselves.
Elsewhere in AI, TeraWulf jumped 12.5% after it said Anthropic agreed to a
20-year deal to use its data center in Kentucky. TeraWulf expects the deal to
bring in roughly $19 billion in revenue. TeraWulf is in the midst of
transitioning its business away from mining bitcoin and into high-performance
computing.
In the oil market, prices drifted after OPEC+ announced Sunday that seven of
its members plan to expand oil production by a combined total of 188,000
barrels per day in August. It was the fifth straight month that OPEC+ members
have agreed to raise output.
The price of a barrel of Brent crude, the international standard, edged up
0.1% to $72.22. That's close to where it was before the United States and
Israel attacked Iran in late February and sent prices spiking.
In the bond market, Treasury yields eased a bit. The yield on the 10-year
Treasury edged down to 4.48% from 4.49% late Thursday.
A report showed that growth last month for U.S. recreation, finance and
other services businesses was roughly in line with economists' expectations.
The survey by the Institute for Supply Management said that some businesses
said they were seeing lower prices for gasoline and diesel, easing inflationary
pressures.
In stock markets abroad, indexes fell modestly across much of Europe and
Asia. Hong Kong's Hang Seng was an outlier and rose 1.1%.
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AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.
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