Wall Street Rises Despite Tech Sector Woes
The US stock market rose Tuesday, but tech stocks took a hit as chipmakers struggled to keep up with expectations. The S&P 500 gained 0.3%, while the Dow Jones Industrial Average surged 567 points, or 1.1%. However, Nasdaq composite dropped 0.1% after briefly falling below its record set last month.
The sector's struggles were led by Micron Technology, which more than tripled this year due to gangbuster growth. But the company's revenue quadrupled from a year ago during the quarter ending May 28, sparking worries about whether such growth is sustainable. Big spenders on computer memory could pull back their investments if AI doesn't produce as promised.
Oil prices continued to ease further from last week's two-month high, with Brent crude for October delivery falling 4.2% to $82.24. Lower oil prices helped ease Treasury yields in the bond market, and traders trimmed their bets that the Federal Reserve would announce a rate hike following its meeting on Wednesday.
Analysts warn of a 'knee-jerk reaction' to China's chipmaking equipment capabilities, but believe the sell-off is overdone. Several major AI-chip spenders are set to report quarterly results this week, which could offer updates on their investment plans.