AI Stocks Boost Wall Street
NEW YORK (AP) — A surge in AI stocks has propelled Wall Street higher. On Monday, the S&P 500 climbed 0.7%, bringing it within 1% of its all-time high, despite many stocks in the index declining. By 1:30 p.m. ET, the tech-focused Nasdaq Composite Index had risen by 1.1%, while the Dow Jones Industrial Average was up 44 points, or 0.1%.
Recent weeks have seen significant fluctuations in AI stocks, leading to worries that their prices might have soared too high. Investors are increasingly questioning whether the vast investments in AI chips and data centers will yield enough productivity and profit gains to justify the expenses.
Broadcom’s shares jumped 4.3% after the announcement of a long-term deal to supply silicon products to Apple, driving the S&P 500 higher. This boost comes after the company had experienced a two-day drop of over 2% leading into the recent holiday weekend.
Investor interest in AI is set to be further tested this week as SK Hynix, a South Korean memory chip manufacturer, plans to raise $28 billion through U.S.-traded shares on the Nasdaq. If successful, this would represent the largest U.S. offering ever, surpassing SpaceX’s IPO, which raised $75 billion last month.
So far this year, SK Hynix’s stock price has more than tripled due to the AI boom, although it has seen significant daily fluctuations, including a sharp 14.6% drop on Thursday.
SpaceX, which owns the xAI business, has also experienced volatility following a successful IPO. Its stock saw a 0.9% decline on the last trading day as it prepares for inclusion in the Nasdaq 100 index, a key benchmark that influences major funds like the QQQ exchange-traded fund.
In other AI news, Terrawolf’s stock increased by 7.9% after it was announced that Anthropic had entered into a 20-year deal to utilize its data center in Kentucky. TeraWulf anticipates the partnership will generate around $19 billion in revenue, as the company shifts its focus from Bitcoin mining to high-performance computing.
Turning to the oil market, prices have been unstable after OPEC+ revealed plans to increase crude oil production by 188,000 barrels per day in August. This marks the fifth consecutive month of output increases from OPEC+ members. As a result, the price of a barrel of Brent crude oil fell 0.5% to $71.79, close to pre-increase levels seen before late February when tensions escalated due to U.S. actions in Iran.
In the bond market, U.S. Treasury yields were relatively steady, with the yield on the 10-year Treasury note slightly dipping to 4.48% from 4.49% late Thursday.
Last month’s growth in U.S. recreational, financial, and other service sectors was generally in line with economists’ predictions. A survey by the Supply Management Association indicated that some companies are experiencing lower gasoline and diesel prices, which are helping to ease inflationary pressures.
In international markets, stock indexes in Europe and most of Asia saw slight declines, though Hong Kong’s Hang Seng managed to rise by 1.1%.
