US Stocks Mixed as Oil Prices Eases Further from Two-Month High
The US stock market has seen mixed results on Tuesday, despite oil prices easing further from their two-month high. The Dow Jones Industrial Average rose by 402 points, or 0.8%, while the Nasdaq composite was down 1.1%. Stock prices of chipmakers continue to decline, with Micron Technology's stock plummeting 10.8% and being the heaviest weight on the S&P 500.
Other companies such as Coca-Cola, Sherwin-Williams, and Illinois Tool Works reported stronger profits for the latest quarter than analysts expected, leading to their stocks rising by 7.1%, 8.3%, and 4.8% respectively. However, this trend of corporate profits has not been enough to offset worries about whether growth in artificial-intelligence technology is sustainable.
Worries are also rising about lower-cost AI models from China potentially reducing demand for memory and basic computing power. This fear was highlighted by the decline of AI-chip stocks such as Micron, Advanced Micro Devices, and Nvidia, which fell 10.8%, 9.6%, and 1% respectively.
Equity analyst Jing Jie Yu of Morningstar believes that the market's reaction to China's progress in chipmaking equipment capabilities has been overdone and is a 'knee-jerk reaction.' He also stated that global chipmaking leaders' dominant position is unlikely to be threatened meaningfully.