Wall Street Begins to Recover
NEW YORK (AP) — Wall Street is on the mend after a tough start to the week. Technology stocks have started to bounce back, and it seems Bitcoin’s downward trend has hit a pause, at least momentarily.
The S&P 500 climbed by 0.9%, inching closer to its prior levels. By 10:15 a.m. ET, the Dow Jones Industrial Average surged by 776 points, or 1.6%, while the Nasdaq Composite saw a smaller increase of 0.5%.
Leading the charge, semiconductor companies experienced significant gains. Nvidia, for instance, increased by 4.9%, reducing its weekly losses to just over 10%. Broadcom saw a 3.8% rise, breaking a slide of 6.3% earlier this week.
These companies have been major players in the S&P 500, benefiting from high expectations for spending on chips as businesses dive into artificial intelligence. For instance, Amazon announced late Thursday that it anticipates spending around $200 billion this year to tap into “significant opportunities in AI, chips, robotics, low-orbit satellites, and more.”
While such hefty investments are reminiscent of other tech giants, they do raise some eyebrows regarding whether all that spending will translate into future profits. As a result, Amazon’s stock dipped 8.5% amid lingering doubts.
Despite the gains on Friday, the S&P 500 is still looking at its third downturn in four weeks. Concerns about high expenditures in AI by major tech firms, along with worries that AI could siphon customers from software companies, have weighed on the market.
Meanwhile, Bitcoin, having seen a dramatic drop over recent weeks, briefly touched around $60,000 late Thursday before rebounding to $68,000.
In commodities, the metal market has found some stability after erratic movements. Gold is up 2% to $4,986.20 per ounce, while silver has dipped 0.3%.
After a remarkable surge driven by a search for safer investments due to political uncertainties, stocks lost momentum last week. Some critics view the U.S. stock market as overly priced and burdensome for governments internationally. However, prices had surged by January, leading critics to label them as unsustainable.
On Wall Street, Bitcoin’s recovery has pulled up stock prices for companies linked to the cryptocurrency market. Robinhood Markets, for example, jumped 11.7%, leading the S&P 500. Coinbase Global rose by 7.3%, and companies focused on Bitcoin saw impressive gains as well.
Smaller U.S. companies also fared well, alongside those dependent on rising consumer spending. These firms appeared to benefit from potentially uplifting reports on consumer sentiment.
A preliminary study from the University of Michigan indicated a slight increase in U.S. consumer sentiment, despite economists predicting a decline. This uplift was primarily seen among households with stocks that benefited from the S&P 500’s record-setting performance at the end of last month.
However, Joan Hsu, director of consumer research, pointed out that sentiment remains “dire” for consumers without stock investments.
Airline stocks showed strength due to optimism about increased travel spending. Notable gains included United Airlines at 5.4%, American Airlines at 4.6%, and Delta Air Lines at 4.4%.
In the Russell 2000, small-cap stocks rose by 2.3%, outperforming the S&P 500. These smaller firms tend to rely more on the U.S. economy’s strength for profits compared to larger global counterparts.
Internationally, stock markets in Europe mostly rose, even with a significant nearly 26% plunge for Stellantis, the car giant traded in Milan. The company announced it would incur costs of 22 billion euros ($26 billion) due to reductions in electric vehicle production, admitting to having “overestimated the pace of the energy transition.”
In Asia, stock prices dipped broadly, although Japan’s Nikkei Stock Average saw a rise of 0.8%. Toyota Motor Corp. recorded a 2% increase following CEO Koji Sato’s announcement of his planned departure in April.
On the bond market side, U.S. Treasury yields remained stable, with the 10-year Treasury yield standing at 4.21% by late Thursday, recovering from a slight early decline.
