The major US stock indices, S&P 500, Nasdaq 100, and Dow Jones Industrial Average, have seen a modest pullback from their yearly highs, even as corporate earnings growth remains strong and the AI boom shows signs of cooling.
The Nasdaq 100 dropped to 29,187, a 6.9% decline from its peak this month and the lowest level since September 16. The S&P 500 fell to 7,660, down 2.42% from its yearly high, while the Dow Jones traded at 52,000, a slight retreat from its high of 54,757.
This week, investors will focus on corporate earnings, with key reports from SpaceX (SPCX), GE Aerospace (GE), and Netflix (NFLX) on Tuesday, followed by Meta Platforms (META) and Tesla (TSLA) on Wednesday. So far, 9% of S&P 500 companies have reported earnings, with blended growth at 29%, marking the third straight quarter of growth above 25%.
Rising crude oil prices are also influencing the market, with Brent reaching $110 and WTI at $101. Higher oil prices benefit energy companies like ExxonMobil (XOM) and Chevron (CVX), but they also fuel inflation concerns, potentially pushing the Federal Reserve to raise interest rates.
The AI sector continues to face jitters, with companies like Nvidia, Micron, and AMD experiencing declines. Anthropic’s slower-than-expected revenue growth and OpenAI’s revised revenue figures have contributed to investor caution. Additionally, rising bond yields for AI firms and warnings from Gartner about future impairments are adding to market uncertainty.