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Financial Markets 06/08 09:34
NEW YORK (AP) -- Wall Street is clawing back some of its steep losses from
Friday, as stocks swept up in the artificial-intelligence boom bounce back on
Monday. Oil prices, meanwhile, are higher following fighting between Israel and
Iran, but they have come off their peaks from overnight.
The S&P 500 rose 0.7% following its 2.6% drop from Friday, which was its
worst since October. The Dow Jones Industrial Average was up 207 points, or
0.4%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1.1% higher.
Some of the best performers were companies that sell computer chips, memory
and other products fueling the AI boom. They had plunged Friday amid worries
that their prices had simply shot too high due to AI euphoria. Such worries
dragged South Korea's Kospi index down 8.3% at the start of Monday, pummeling
tech stocks there like Samsung Electronics and SK Hynix.
But prices recovered as trading moved westward through Europe to New York.
Micron Technology rose 8.3% after sliding 13.3% Friday for the largest loss in
the S&P 500. That resumed a run where its stock has more than tripled so far in
2026.
Marvell Technology climbed 8.8% in its first trading after S&P Dow Jones
Indices said the semiconductor company's stock has grown enough to join its
widely followed S&P 500 index. Marvell's stock has also more than tripled so
far this year, aided by a 32.5% surge in one day last week. That was its best
day since it began trading in 2000, and it came after Nvidia's CEO, Jensen
Huang, suggested at a conference in Taiwan that Marvell could be "the next
trillion-dollar company."
That such a comment could add billions of dollars to a company's value in an
instant suggests to critics that AI stocks are running too hot. Chip and memory
companies are indeed reaping big growth because of the AI boom, but their stock
prices have been soaring at astounding speeds. A widely followed index of
semiconductor stocks surged nearly 85% for the year so far through Thursday,
for example.
Now, the question is whether Friday's drop is the start of a wider downturn
or just a pause that shakes out excessive optimism.
Michael Wilson, a strategist at Morgan Stanley, is relatively optimistic.
"Markets rarely move in a straight line at the pace seen since the March lows,"
he wrote in a report. "In our view, a correction was inevitable and ultimately
healthy if this bull market is going to extend into year-end" and pull the S&P
500 to his baseline target of 8,000. That would be an 8.3% rise from Friday's
close.
In the oil market, prices climbed after Israel and Iran launched strikes
against each other, threatening to drag the region back into full-scale war.
The price for a barrel of Brent crude oil, the international standard, briefly
topped $98 overnight, but it later eased back to $94.25, up 1.2%, after the
Iranian military said that it was halting offensive operations.
High oil prices caused by the war with Iran have already sent inflation
higher, which increases not only bills for households but also yields in the
bond market. High yields worldwide recently have threatened to slow economies
and undercut prices for stocks and all kinds of other investments.
On Monday, Treasury yields eased a bit to take some pressure off the stock
market. The yield on the 10-year Treasury fell to 4.51% from 4.55% late Friday
and gave back some of Friday's jump.
In stock markets abroad, indexes dipped in Europe following more severe
losses in Asia.
Japan's Nikkei 225 dropped 3.8% after the Japanese government revised the
country's annualized economic growth rate to 1.8% for the first quarter this
year, down from an earlier estimate of 2.1%.
Stocks also fell 1.7% in Shanghai and 1.2% in Hong Kong.
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AP Business Writers Yuri Kageyama and Matt Ott contributed to this report.
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