Wall Street holds steadier as AI stocks recover some of their sell-off
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- Wall Street steadied after last week’s bruising AI-driven sell-off, as chip and memory stocks such as Micron and Marvell roared back and lifted the Standard & Poor’s 500 index and the Nasdaq composite.
- A brief oil-price spike tied to Israeli-Iranian strikes kept inflation and bond-yield fears alive, even as Brent crude retreated from near $100 a barrel.
- Investors are debating whether the AI boom’s wild swings signal a bubble or a “healthy” correction, as global markets from Seoul to Tokyo reel from tech volatility.
Wall Street held steadier Monday and recovered some of its sell-off from last week, as stocks swept up in the artificial intelligence boom bounced back. Oil prices, meanwhile, rose after fighting between Israel and Iran, but they pared their biggest gains.
The Standard & Poor’s 500 index added 0.3%, coming off a drop of 2.6% from Friday that was its worst since October. The Dow Jones industrial average fell 0.2% and the Nasdaq composite climbed 0.9%.
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 shot too high due to AI euphoria. Such worries dragged South Korea’s Kospi index down 8.3% early Monday, pummeling tech stocks there such as Samsung Electronics and SK Hynix.
But prices recovered as trading moved westward through Europe to New York. Micron Technology rose 9.9% after sliding 13.3% on Friday for the largest loss in the S&P 500. That resumed a run where its stock has more than tripled in 2026.
Marvell Technology climbed 9.6% 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 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 chief executive, 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 in revenue and profit 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 through Thursday, for example.
Now, the question is whether Friday’s drop was the start of a downturn or just a pause that helps shake 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.
Corning climbed 5.6% after Amazon announced a multibillion-dollar deal in which Corning will produce optical fiber, cable and other products for its data centers across the country.
That helped offset a 0.9% drop for Campbell’s, which reported a stronger profit for the latest quarter than analysts expected but also a worse decline in revenue. The company’s stock is also set to drop out of the S&P 500 index when Marvell Technology’s stock joins it.
All told, the S&P 500 rose 21.99 points to 7,405.73. The Dow dipped fell 80.77 points to 50,786.01, and the Nasdaq composite gained 220.23 points to 25,929.66.
In the oil market, prices jumped 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 regressed after Israel and Iran appeared to back away from further strikes. Brent’s price settled at $94.25 per barrel, up 1.2% from Friday.
High oil prices caused by the war with Iran already have 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 ticked a bit higher after their jump Friday. The yield on the 10-year Treasury edged up to 4.56% from 4.55%.
In stock markets abroad, indexes edged lower Europe following sharp losses in Asia.
Japan’s Nikkei 225 dropped 3.8%, while stocks fell 1.7% in Shanghai and 1.2% in Hong Kong.
Choe writes for the Associated Press.
