Wall Street rebounds on AI stocks, ASX set to rise
Stan Choe
Updated ,first published
Wall Street remained more stable, recovering some of last week’s selloff as stocks rebounded from the AI boom. Meanwhile, oil prices rose in the wake of the conflict between Israel and Iran but have clawed back their biggest gains.
The S&P 500 index rose 0.3 percent since Friday, following a 2.6 percent decline in its worst performance since October. The Dow Jones Industrial Average fell 80 points (0.2 percent) and the Nasdaq composite rose 0.9 percent.
The Australian share market will move higher in the first session of the week following the King’s Birthday bank holiday, with futures pointing to a gain of 29 points, or 0.3 per cent, when it opens at 6.08am AEST. The Australian dollar was trading at 70.44¢.
Some of Wall Street’s best-performing companies were companies selling computer chips, memory and other products fueling the artificial intelligence boom. They had fallen on Friday due to concerns that their prices had risen too high due to AI enthusiasm. Such concerns dragged South Korea’s Kospi index down 8.3 percent early Monday, leaving tech stocks such as Samsung Electronics and SK Hynix hard hit.
But as trade moved westward through Europe to New York, prices recovered. Micron Technology rose 9.9 percent after losing 13.3 percent on Friday, the biggest loss in the S&P 500. This continued a rally that has seen its shares more than triple so far in 2026.
Marvell Technology rose 9.6 percent in its debut after S&P Dow Jones Indices said the semiconductor company’s shares had grown enough to join the widely followed S&P 500 index. Marvell’s shares have also more than tripled so far this year, helped by a 32.5 percent one-day jump last week. It was its best day since it began trading in 2000 and came after Nvidia CEO Jensen Huang suggested at a conference in Taiwan that Marvell could be “the next trillion-dollar company.”
The fact that such a comment could instantly add billions of dollars to a company’s value indicates to critics that AI stocks are very hot. Chip and memory companies are indeed experiencing massive growth in revenue and profits due to the AI boom, but their stock prices are rising at dizzying speeds. A widely followed semiconductor stock index, for example, was up nearly 85 percent for the year through Thursday.
The question now is whether Friday’s decline is the beginning of a pullback or just a pause that helps shake over-optimism.
Michael Wilson, a strategist at Morgan Stanley, is relatively optimistic. “Markets rarely move in a straight line at the pace seen since the March lows,” he wrote in a report. “In our view, if this bull market is to continue through the end of the year, a correction will be inevitable and ultimately healthy,” pulling the S&P 500 back to its key target of 8,000. This represents an increase of 8.3 percent from Friday’s close.
Corning rose 5.6 percent after Amazon announced a multibillion-dollar deal in which Corning will produce fiber optics, cables and other products for data centers across the country.
That helped offset a 0.9 percent decline for Campbell’s, which reported a stronger profit than analysts expected in its latest quarter but also a worse decline in revenue. When Marvell Technology’s shares are included, the company’s shares will also fall from the S&P 500 index.
Overall, the S&P 500 rose 21.99 points to 7,405.73. The Dow Jones Industrial Average fell 80.77 to 50,786.01, and the Nasdaq composite fell 220.23 to 25,929.66.
In the oil market, prices rose after Israel and Iran attacked each other, threatening to drag the region into an all-out war again. The barrel price of Brent crude oil, the international standard, briefly rose above $98 overnight.
But it later receded after Israel and Iran backed away from further attacks. The price of Brent increased by 1.2 percent compared to Friday, reaching $94.25 per barrel.
High oil prices caused by the war with Iran have already driven up inflation, driving up not only household bills but also yields in the bond market. Recent high yields around the world have threatened to slow economies and drive down the prices of stocks and every other investment.
On Monday, Treasury yields rose slightly after Friday’s rise. The yield on the 10-year Treasury bond increased from 4.55 percent to 4.56 percent.
Indices on stock markets abroad fell in Europe following sharp losses in Asia.
While Japan’s Nikkei 225 index fell 3.8 percent, it fell 1.7 percent in Shanghai and 1.2 percent in Hong Kong.
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