NEW YORK — Wall Street was trending higher again on Monday as stocks of chip makers and other winners of the artificial intelligence boom took off on a roller coaster ride.
The S&P 500 rose 0.6%, snapping off its first losing week in the past three weeks and falling for the third time since late March. As of 9:35 a.m. ET, the Dow Jones Industrial Average was up 122 points, or 0.2%, and the Nasdaq Composite Index was up 1%.
Nvidia rose 1.9%, helping the market recover some of its losses after becoming the heaviest stock on the S&P 500 index on Friday. SanDisk rose 6.7% after falling 29% last week.
These stocks have been under pressure for weeks over concerns that the hype surrounding AI has pushed their stocks too high. Meanwhile, companies are making billions of dollars as customers pour money into AI chips and data centers. But all that spending could disappear if AI doesn’t produce the benefits and productivity promised.
Wall Street may soon get a hint when the companies spending the most on AI report their latest quarterly results. On Wednesday, Alphabet is scheduled to report spring earnings to investors and provide an update on its AI efforts.
Companies of all types, including non-tech companies, are under pressure to report strong profit growth heading into the spring. They will need to do so to justify large moves in stock prices. Despite recent volatility, the index is near record levels due to AI stocks.
AMC Entertainment rose 11.6% after the movie theater operator reported revenue for the latest quarter beat analysts’ expectations. He also said some theaters in Los Angeles and other cities screened “The Odyssey” for more than 85 hours straight from Thursday through Sunday to meet demand.
Domino’s Pizza rose 4.2% after its spring earnings beat expectations. CEO Russell Weiner said orders are increasing in both the company’s takeout and delivery businesses, even as the industry as a whole continues to “face consumer demand pressures.”
Much of that pressure comes from still-high inflation, thanks in large part to soaring gasoline prices. Inflation last month wasn’t as bad as economists expected, but if oil prices continue to rise, inflation could accelerate again.
The price of a barrel of Brent crude oil fell below $72 earlier this month, almost returning to the price it was before the war with Iran began. But as fighting continues in the Middle East, that number has skyrocketed.
On Monday, prices fluctuated widely between about $86 and $91. It was last down 0.4% at $87.76.
Concerns over high oil prices and higher inflation have pushed yields on U.S. Treasuries higher in the bond market, threatening to slow the economy and lower the prices of stocks and other investments.
The yield on the 10-year U.S. Treasury rose to 4.56% from 4.55% late Friday, up from just 3.97% before the war with Iran. Rising yields have already pushed the average interest rate on a 30-year mortgage to its highest level in about a year.
In overseas stock markets, European indexes fell.
Things were more volatile in Asia, where South Korea’s Kospi fell 4.5%. The company is at the center of big swings in AI stocks because it is controlled by two high-tech companies, Samsung Electronics and SK Hynix.
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Stan Cho, Associated Press
AP Business Writers Chan Ho-him and Matt Ott contributed to this report.
