Nvidia Sinks Amid AI Boom Woes as US Stocks Drift Higher Ahead of Key Week
US stocks drifted higher on Monday ahead of a week packed with potentially market-moving events. The S&P 500 slipped 0.3% and pulled further from its all-time high set earlier this month.
The Dow Jones Industrial Average was up 59 points, or 0.1%, as of 1:42 p.m. Eastern time, while the Nasdaq composite fell 0.6% lower.
Tech stocks led the way downward following big swings through the summer on worries that the frenzy around artificial-intelligence technology sent prices too high and that the huge demand for AI chips won't be sustainable if they don't produce enough profits.
Nvidia, a chip giant and one of Wall Street's largest and most influential stocks due to its success in the AI boom, sank 2.3% and was the heaviest weight on the S&P 500. Drops of 6% for Micron Technology and 2% for Broadcom also helped drag the index lower.
The U.S. Treasury Department announced a surprise move last week to increase the size of planned buybacks of Treasurys, which could help contain the rise in yields for 10- and 30-year Treasurys.