The US stock market rebounded from opening losses in Tuesday’s trade as a series of upbeat earnings reports and a retreat in crude oil prices overshadowed recent pressure on artificial intelligence (AI)-related stocks.
The blue-chip Dow Jones Industrial Average rebounded 1.5% from the day’s low, while the S&P 500 recovered 1%. The Nasdaq Composite climbed 1.6% from the day’s low. Among individual stocks, 3M rallied 4% after the industrial and safety products maker reported results that exceeded Wall Street estimates.
The market has been under pressure recently amid concerns about the sustainability of the AI trade, as worries over debt and demand have grown. Adding to these concerns, data centre infrastructure company Elice Inc. plunged as much as 33% during its trading debut in Seoul.
However, AI-related stocks staged a modest recovery as the session progressed. Micron Technology, Intel and SanDisk each rose around 2%, while Seagate Technology gained 2% and Advanced Micro Devices (AMD) advanced more than 1%. The VanEck Semiconductor ETF (SMH) added nearly 1%, while CoreWeave gained more than 3%.
Chip stocks have fluctuated between gains and losses in recent sessions but have largely trended lower amid intensifying Chinese competition, tight NAND supply, expectations of higher interest rates and concerns about the sustainability of AI infrastructure spending.
These stocks suffered heavy losses last week, raising concerns about the AI trade following a sharp rally earlier this year. Meanwhile, in Asian trading, SK Hynix plunged 4.23%, falling to its lowest level since April and extending its October losses to 31%.
The decline has dragged SK Hynix’s stock down 59% from its summer peak, reversing a significant portion of its earlier gains as one of Asia’s biggest beneficiaries of the AI-driven memory boom.
In the commodity market, Brent crude oil prices retreat sharply after hitting a 5-month peak, falling to $107 from the day’s high of $110.
Key earnings in focus
Investors are also awaiting a spate of earnings for clues on whether the AI boom can justify the billions of dollars being poured into the industry. Netflix Inc. reports on Tuesday, followed by Tesla, Meta, and International Business Machines Corp. the following day.
Some investors are betting that accelerating US inflation and tremors across the AI sector will amplify swings in tech shares and spill over into the broader market.
(With inputs from agencies)
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
