AI Stocks Suffer Amid Rising Oil Prices
US stock futures are steady as AI-related stocks continue to decline and oil prices rise.
The S&P 500, Dow Jones Industrial Average, and Nasdaq futures remain largely unchanged. Shares of Oracle, Marvell Technology, Intel, Micron Technology, and Target have all taken a hit, with declines ranging from 1% to nearly 2%. This sell-off is attributed to the volatility in AI-related stocks, which have seen significant gains but are now facing reduced confidence in near-term payoffs.
The ongoing conflict over the Strait of Hormuz has led to an increase in crude prices. Brent crude rose 1% to $91.91 per barrel, while US benchmark crude oil climbed 1.1% to $84.99 per barrel. This surge in oil prices is pushing inflation higher and contributing to bond yields jumping.
The yield on the 10-year US Treasury edged down slightly to 4.70%, but remains above its pre-war level of 3.97%. The 30-year Treasury yield also ticked lower, although it's still near its highest level since 2007. These high yields are impacting the housing industry by sending long-term mortgage rates near their highest level in a year.