NEW YORK (AP) — Stocks in the artificial-intelligence industry are bouncing back on Wall Street Monday and recovering some of their steep losses from last week, but the rest of the market and stocks worldwide are still shaky.
The S&P 500 rose 0.5%, coming off its worst week since June. The Nasdaq composite, which is full of technology stocks, jumped 1%. But many stocks outside of the AI industry were more subdued, and the Dow Jones Industrial Average was down 76 points, or 0.1%, as of 9:35 a.m. Eastern time.
Trading was also unsteady in stock markets around the world. Indexes dropped more than 1% across Europe, including 1.6% in Paris following violent protests over the weekend that could put even more pressure on European bond markets. Yields cranked higher for bonds worldwide despite drops for oil prices.
Even with all the cross currents, AI stocks stood out, as they have for most of the past few years. A frenzy in spending for AI technology has forced them to the forefront of the market, sending them to record prices and driving indexes higher. Last week, though, AI stocks tumbled on worries about how expensive it has become to borrow money, which could threaten the boom.
Much of the spending on AI chips and data centers has come from borrowed money, and Treasury yields in the bond market have recently hit their highest levels in years or even decades. That in turn has raised the cost of borrowing money for everyone, from the U.S. government to companies to households.
CoreWeave, a company that’s borrowed to buy AI chips that it rents out to customers over the cloud, has been at the center of the market’s shifts. It rose 3.2% Monday, but only after losing more than a quarter of its total value last week.
Nvidia added 0.8% and was one of the strongest forces lifting the S&P 500 Monday. Because it’s the largest stock on Wall Street by total market value, a 1% move for its stock has more effect on the index than any other’s.
SpaceX, which controls the xAI business, climbed 2.3%. Its founder, Elon Musk, pledged on Monday to give one share of SpaceX to “every kid in America” next year.
The offer came after Anthropic said over the weekend that it will commit 5% of the shares in its highly anticipated initial public offering of stock to a new “public benefit” fund.
AI stocks rose ahead of some profit reports coming later in the week that could offer more details about the strength of AI spending.
Meta Platforms, which is pushing its Muse AI agent, will report its latest quarterly results on Wednesday. Lam Research, which supplies equipment and services for the making of semiconductors, will also talk about how its business is going on Wednesday.
Expectations are high across the board for U.S. companies’ profits from the summer. Analysts are forecasting overall growth of 29% for companies in the S&P 500 from the prior summer, according to FactSet. Those high expectations are what has allowed the U.S. stock market to run to records despite worries about war, high inflation and pressure from the bond market,
For stocks to keep rising, companies will need to meet those high expectations and offer signals for continued growth.
Cleveland-Cliffs jumped 12.5% Monday after the steel company reported a stronger profit for the latest quarter than analysts expected. CEO Lourenco Goncalves said it was the strongest quarter for the company in three years and that “average selling price, sales volumes, and unit costs all moved in the right direction” from the spring.
In stock markets abroad, the rebound for AI stocks helped South Korea’s Kospi jump 1.8% to recover some of its 14.5% drop from last week. It is dominated by two stocks enmeshed in the AI industry, Samsung Electronics and SK Hynix, which has made it much jumpier than other markets worldwide.
In Europe, indexes fell following mass protests against the rising cost of living and poor school conditions. The protests could put pressure on governments to boost their spending to offer help, but that would likely only add to their already big piles of debt. Germany’s DAX lost 1.4%, while the FTSE 100 slid 1.3% in London.
Yields jumped for French bonds on worries about the government’s budget and climbed much more than yields for Germany, which investors have historically seen as a safer bet.
In the U.S. bond market, yields nudged higher as the yield on the 10-year Treasury climbed to 5.10% from 5.09% late Friday. It topped 5.30% earlier this month and touched its highest level since 2002.
AP Business Writer Chan Ho-him contributed to this report.
