AI stocks slid again on Tuesday, dragging the Nasdaq down 0.7% and pulling markets lower across Asia, Europe and the United States. Rising oil prices and climbing Treasury yields added to the pressure on markets.
The Nasdaq fell 0.7% as of 12:45 p.m. Eastern time, as artificial-intelligence stocks resumed their slide and weighed on Wall Street. The S&P 500 fell 0.3% even though most stocks in the index rose, and the Dow Jones Industrial Average dropped 173 points, or 0.3%.
AI stocks resume their drops
The selling started in Asia. Samsung Electronics tumbled 6.9% in Seoul after a preliminary look at its second-quarter results, in which the company said it expects to report operating profit surged roughly 1,800% from a year earlier. Analysts called the numbers surprisingly good, but they were not enough for investors after the stock had well more than doubled so far this year.
On Wall Street, AI stocks have faced similar pressure in recent weeks on worries their prices shot too high and that AI may not produce enough productivity and profits to justify the spending on chips and data centers. Micron Technology fell 6.1% and was the heaviest weight on the S&P 500, while Intel sank 9.2%. Nvidia rose 0.9% after slipping earlier, easing some pressure on the broader market.
Oil and yields add pressure
Beyond tech, stocks also felt strain from rising oil prices after the British military said three tankers were struck by projectiles in the Strait of Hormuz, denting hopes that the war in Iran may be winding down. Brent crude rose 3% to $74.12.
Higher oil prices put upward pressure on inflation, and the yield on the 10-year Treasury rose to 4.52% from 4.48%. The worry is that high inflation may force the Federal Reserve and other central banks into an interest rate hike, which can slow the economy and weigh on prices for many investments.
Losses spread across markets
The weakness reached other major indexes abroad. South Korea’s Kospi tumbled 4.9% because Samsung Electronics alone makes up more than a quarter of the index. Japan’s Nikkei 225 fell 2.1%, and Germany’s DAX lost 1.4%.
Source: U.S. News & World Report
Trading involves risk.
Risk Disclaimer
