NEW YORK (AP) — The Roller coaster ride for AI stocks collapsed again on Tuesday, dragging Wall Street lower.
The S&P 500 fell 0.4%, although the majority of stocks in the index rose. The declines for stocks in the Artificial intelligence Industry pushed the Nasdaq composite down 1.2%, while the Dow Jones Industrial Average lost 130 points, or 0.2%, from its record.
The weakness began in Asia, where Samsung Electronics fell 6.9% in Seoul. The tech giant gave a preliminary outlook on its second quarter performance and the numbers were strong. Samsung Electronics said it expects its operating profit to rise about 1,800% year-on-year.
Analysts called the numbers surprisingly good, but they still weren’t enough for investors after Samsung Electronics’ stock came in and has significantly more than doubled year to date.
On Wall Street, AI stocks were in the red We have faced similar pressure in recent weeks They worry that their prices will skyrocket too much and that AI may not bring enough productivity and profit to make all the investments in chips and data centers worthwhile.
Declines of 6.5% in Advanced Micro Devices, 9.7% in Intel and 4.7% in Micron Technology were the biggest weights in the market.
SpaceX, which owns the xAI business, fell 6.8% in the first trading session afterward Inclusion in the Nasdaq 100 index.
Outside technology, Vertex Pharmaceuticals fell 1.4% after announcing it agreed to buy Crinetics Pharmaceuticals for $85 per share in cash. Crinetics, which develops therapeutics for endocrine diseases, rose 98.7%.
Rivian Automotive fell 18.1% after the electric vehicle maker said it was selling 75 million of its shares, diluting the ownership stakes of former shareholders.
Overall, the S&P 500 fell 33.58 points to 7,503.85. The Dow Jones Industrial Average fell 130.76 to 52,925.15 and the Nasdaq Composite fell 302.47 to 25,818.69.
According to the British military, stocks also came under pressure from a rise in oil prices Three tankers were hit through projectiles the Strait of Hormuz. The United States later revoked a license that had authorized the sale of Iranian oil as part of a tentative deal to end the fighting between the USA and Iran.
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That dimmed hopes that the Strait of Hormuz could be fully reopened to oil tankers carrying crude from the Persian Gulf to customers around the world.
Brent crude, the international standard, rose 3% to settle at $74.16 a barrel.
Higher oil prices put upward pressure on inflation and Treasury yields rose in the bond market. The yield on the 10-year Treasury note rose to 4.54% from 4.48% late Monday and from just 3.97% before the start of the war with Iran.
High yields worldwide have unsettled investors since the war pushed oil prices above $100 a barrel in March. There are concerns that high inflation could force the Federal Reserve and other central banks to raise interest rates. Higher interest rates can keep inflation under control, but they also slow the economy and weigh on prices for all types of investments.
In overseas stock markets, South Korea’s Kospi fell 4.9% as Samsung Electronics alone accounted for more than a quarter of the index.
Japan’s Nikkei 225 fell 2.1% and Germany’s DAX lost 1.4%, reflecting two of the world’s biggest moves.
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AP business reporters Matt Ott and Elaine Kurtenbach contributed to this report.
https://apnews.com/article/stocks-markets-oil-ai-iran-e0194864aba4379a069ce31becae2558
