Stocks rose Monday and recovered some of their losses from a rare losing week.
The Standard & Poor’s 500 index climbed 1.2% and broke a five-day losing streak. It was coming off just its second losing week in the last 13. The Dow Jones industrial average added 0.6%, and the Nasdaq composite rallied 2.1%.
Several stocks boosted by the artificial-intelligence boom rose after Samsung Electronics and SK Hynix said they will invest roughly $518 billion in a new chipmaking hub in South Korea, as its president hopes to capitalize on surging AI demand.
Applied Materials, whose equipment helps make semiconductors, rallied 10.8% to vault its gain for the year so far above 170%.
AI stocks have been on a roller-coaster ride recently after soaring to tremendous heights. They’re under pressure because of worries that their profits can’t possibly keep pace with the huge gains for their stock prices. And the moves have an outsized effect on investors because AI stocks have become some of Wall Street’s largest and most influential, giving them more weight on indexes than others.
Nvidia was one of the strongest forces lifting the S&P 500, for example, after its stock rose 1.3%. That’s because it’s Wall Street’s biggest stock with a total value of more than $4.7 trillion.
SpaceX, which owns the xAI business along with rockets, is already worth more than $2 trillion after its stock’s ballyhooed debut on Nasdaq this month, with sharp rises and falls along the way. It’s become big enough that Nasdaq said Elon Musk’s company will join the Nasdaq 100 index before trading begins July 7, which will force funds tracking the index to buy the stock.
SpaceX climbed 7.2%.
Outside of AI, Comcast rose 4.5% after saying it will split off its NBCUniversal media business and Sky from its broadband and wireless business. Its stock came into the day with a loss of 17.3% for the year so far.
That helped offset a 5.2% drop for Verizon Communications, which said it’s paying $625 million as part of a deal to combine its international wireline connectivity and managed network services business with some of London-based BT Group’s subsidiaries in a joint venture.
All told, the S&P 500 rose 86.41 points to 7,440.43. The Dow added 306.63 points to 52,182.74, and the Nasdaq composite rallied 522.53 points to 25,820.14.
The gains for the stock market came even though oil prices rose. The price for a barrel of Brent crude, the international standard, climbed 1.8% to $73.91, pulling back above where it was before the war with Iran began. Benchmark U.S. crude for August delivery rose 2.2% to settle at $70.75 per barrel.
After attacks across the Persian Gulf over the weekend, the United States and Iran on Monday separately announced they will send delegations to Qatar this week, though Tehran insisted it has not agreed to meet with the United States “at any level.”
The hope is that an end to the war with Iran will give oil tankers full access again to the Strait of Hormuz, allowing them to exit the Persian Gulf and deliver crude to customers worldwide. That would help lower the price of oil, whose jumps because of the war have sent a punishing wave of inflationaround the world.
If oil prices do recede and stay low enough, it could keep enough pressure off inflation to allow the Federal Reserve and other central banks to keep interest rates steady or even cut them instead of hiking them.
Higher interest rates can keep a lid on inflation, but they also slow the economy and hurt prices for all kinds of investments. High yields worldwide have been rattling investors after oil prices burst above $100 per barrel because of the war.
The yield on the 10-year Treasury edged down to 4.37% from 4.38% late Friday and from 4.56% early this month.
In stock markets abroad, indexes dipped modestly in Europe after mixed performances in Asia.
Stocks jumped 1.6% in Hong Kong and 1.2% in Shanghai for two of the world’s biggest gains, while South Korea’s Kospi slipped 0.2%.
Choe writes for the Associated Press.
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