Wall Street Closes Mixed as AI Stocks Retreat
US stocks closed mixed on Tuesday, with the main pressure coming from profit-taking in artificial intelligence-related stocks. The S&P 500 fell 0.6%, while the Nasdaq Composite Index fell 1.2% as investors reduced exposure to semiconductor stocks after an earlier rally.
Several major chip companies posted sharp declines. Nvidia fell 2.4%, Broadcom fell 4.4%, Micron fell 6.2%, AMD fell 7.3%, and Intel plunged 8.5%. These declines indicate that AI stock valuations have again become a sensitive area as investors begin to reassess the upward momentum of the technology sector.
Meanwhile, SpaceX rose 4.8%, continuing its gains since its initial public offering on Friday, following reports that the company would acquire Cursor for $60 billion. These moves helped cushion some of the market's pressure, although they were not enough to lift the tech-based index as a whole.
The Dow Jones Industrial Average rose 328 points to a new record, buoyed by optimism over a preliminary US-Iran agreement. The two countries are expected to sign the agreement on Friday, while US officials have stated that the Strait of Hormuz will reopen. This sentiment has fueled the perception that the risk of energy supply disruptions may be easing.
Bond yields continued to decline as lower oil prices helped ease inflation concerns. In terms of market transmission, weaker oil could dampen inflation expectations, ease pressure on yields, and provide room for interest-rate-sensitive stock valuations.
The market also awaits the Federal Reserve's decision on Wednesday, with interest rates expected to remain on hold. However, attention remains on Fed Chairman Kevin Warsh, who is expected to push for changes to the monetary framework and a smaller balance sheet.
In the financial sector, JPMorgan rose 3.7% and Visa gained 2.8%, helping support the Dow. Market focus will now be on Fed signals, the direction of bond yields, the continuation of AI's stock correction, and the certainty of the signing of the US-Iran deal on Friday
Source: Newsmaker.id
