NEW YORK — Wall Street drifted to a quiet finish Monday after stocks of chipmakers and other winners of the artificial-intelligence boom trimmed some of their recent losses.
The S&P 500 dipped 0.2 per cent, coming off its first losing week in the last three and just its third since the end of March. The Dow Jones Industrial Average dropped 307 points, or 0.6 per cent, and the Nasdaq composite was basically flat after slipping by less than 0.1 per cent.
Nvidia added 0.2 per cent and held firmer following its drop on Friday, when it was the heaviest weight on the S&P 500. Sandisk climbed 2.7 per cent after tumbling 29 per cent last week.
Advanced Micro Devices rose 1.6 per cent after announcing an expanded partnership where Microsoft will use its products for AI, including its new Helios product starting in the second half of the year.
Such stocks have been under pressure for weeks on worries that their prices shot too high in the euphoria around AI. On one hand, companies are making billions of dollars in revenue as customers pour money into AI chips and data centers. But all that spending may fizzle out if AI doesn’t produce as much profit and productivity as promised.
Wall Street may get some hints on that soon as some of the biggest spenders on AI report their latest quarterly results. On Wednesday, Alphabet will tell investors how much it made during the spring and give updates on its AI efforts.
All kinds of companies are under pressure to report strong growth in profit for the spring. They will need to in order to justify the big moves their stock prices have made. Indexes are near their records, even with the recent shakiness for AI stocks.
AMC Entertainment jumped 26.8 per cent after the movie-theater operator reported stronger revenue for the latest quarter than analysts expected. It also said some of its theaters in Los Angeles and other cities ran “The Odyssey” for more than 85 straight hours from Thursday through Sunday to meet demand.
Domino’s Pizza climbed 2.1 per cent after delivering stronger revenue for the spring than expected. CEO Russell Weiner said the company saw growth in orders for both its carryout and delivery businesses, even with the broad industry continuing “to face pressure on consumer demand.”
Another restaurant chain, Jersey Mike’s, is beginning its roadshow to raise interest in its stock, which it’s planning to sell on the New York Stock Exchange for between US$21 and US$25 per share in an initial public offering.
It and other businesses are facing pressure in selling to U.S. households feeling crunched by still-high inflation, thanks in large part to high gasoline prices. The average cost for a gallon of gasoline in the United States has gotten back above US$4 because of higher crude oil prices.
After dropping below US$72 early this month, roughly back to where it was before the war with Iran began, the price for a barrel of Brent crude has been jumping recently as fighting continues in the Middle East.
On Monday, the price swung between roughly US$86 and US$91 before settling at US$89.22, up 1.3 per cent.
The war with Iran is keeping oil tankers from using the Strait of Hormuz to deliver crude from the Persian Gulf to customers, which pushes up oil’s price. S&P Global counted only 127 vessels crossing the strait during the week through Sunday, down nearly 50 per cent from the week before.
Worries about expensive oil and high inflation have sent Treasury yields higher in the bond market, which threaten to slow the economy and undercut prices for stocks and other investments.
The yield on the 10-year Treasury climbed to 4.59 per cent from 4.55 per cent late Friday and from just 3.97 per cent before the war with Iran. Higher yields have already sent the average 30-year mortgage rate to its highest level in nearly a year.
The higher yields weighed on the broad U.S. stock market, and the majority of stocks fell on Wall Street.
A 3.8 per cent drop for Warner Bros. Discovery also helped erase a gain for the S&P 500 early in the day. A federal judge ordered it and Paramount to halt their US$81 billion merger for at least two weeks, allowing states that are challenging the deal more time to see their case through in court.
All told, the S&P 500 fell 14.41 points to 7,443.28. The Dow Jones Industrial Average dropped 307.16 to 51,839.26, and the Nasdaq composite slipped 12.17 to 25,508.07.
In stock markets abroad, indexes ended mixed in Europe.
The moves were sharper in Asia, where South Korea’s Kospi fell 4.5 per cent. It’s been at the center of the huge swings for AI stocks because it’s dominated by two tech companies, Samsung Electronics and SK Hynix.
Stocks were stronger in China, where indexes rose 2.4 per cent in Hong Kong and 0.9 per cent in Shanghai.
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Stan Choe, The Associated Press
AP Business Writers Chan Ho-him and Matt Ott contributed to this report.
