AI Stocks in Free Fall as Oil Prices Ease Further
Wall Street's shift away from AI stocks continues to accelerate as chipmakers and other companies that have benefited from the artificial-intelligence boom experience significant losses. The S&P 500 rose 0.3% in midday trading, but the modest gain masked big swings underneath the surface.
The Dow Jones Industrial Average was up 567 points, or 1.1%, as of 11:30 a.m. Eastern time, while the Nasdaq composite, which is full of AI stocks, dropped 0.1% after briefly falling 9.3% below its record set last month.
Micron Technology's stock has more than tripled this year following gangbuster growth, with revenue quadrupling from a year earlier in the quarter through May 28. However, worries are rising about whether such growth is sustainable due to concerns over AI's profitability and productivity as well as the potential threat of lower-cost AI models from China.
On the other hand, oil prices have been easing further from their two-month high, with Brent crude falling 4.2% to $82.24 for a barrel to be delivered in October. The price drop has helped ease Treasury yields in the bond market and pushed traders to trim their bets that the Federal Reserve could announce a hike to interest rates following its latest meeting on Wednesday.