AI Chip Rally Lifts Wall Street Despite Rising Oil Prices
The benchmark S&P 500 rose 0.9%, while the Dow Jones Industrial Average gained 372 points, or 0.7%, with about an hour left in trading. The Nasdaq Composite outperformed, climbing 1.3%, led by technology shares.
ERBIL (Kurdistan24) – Wall Street advanced on Tuesday as renewed gains in artificial intelligence-related stocks outweighed concerns over rising oil prices fueled by continued fighting between the United States and Iran.
The benchmark S&P 500 rose 0.9%, while the Dow Jones Industrial Average gained 372 points, or 0.7%, with about an hour left in trading. The Nasdaq Composite outperformed, climbing 1.3%, led by technology shares.
AI-related companies remained at the center of the market rally, extending gains for a second consecutive session after suffering sharp losses last week amid concerns that valuations had risen too quickly and that heavy investment in artificial intelligence might not generate the expected returns.
Micron Technology surged 12.6%, adding to Monday's 1.9% gain after dropping 13.3% last week. Nvidia also advanced 2%, with the two companies providing the biggest boost to the S&P 500.
The stock market's gains came despite another jump in oil prices. Brent crude briefly approached $92 per barrel for the first time in more than five weeks before easing to settle around $91.01, up 2% on the day. The increase reflects ongoing hostilities between the United States and Iran and marks a sharp rise from below $72 per barrel earlier this month, before the conflict escalated.
Higher energy prices have renewed concerns that inflation could accelerate again after showing signs of easing. Persistent inflation could prompt the U.S. Federal Reserve and other central banks to maintain or raise interest rates, potentially slowing economic growth and weighing on financial markets.
Reflecting those concerns, the yield on the benchmark 10-year U.S. Treasury note rose to 4.63%, up from 4.60% on Monday and significantly higher than the 3.97% level recorded before the conflict with Iran began.
Investor sentiment was also supported by stronger-than-expected quarterly earnings from several major U.S. companies, helping offset worries over inflation and geopolitical tensions.