Wall Street rebounds on AI stocks, ASX set to rise
Stan Choe
Wall Street recovered some of Friday’s selloff as stocks soared by the artificial intelligence boom rebounded on Monday. Meanwhile, oil prices rose after the conflict between Israel and Iran, but fell off their peak levels overnight.
The S&P 500 index fell 2.6 percent compared to Friday, its worst performance since October, and rose 0.7 percent. The Dow Jones Industrial Average was up 7 points, or less than 0.1 percent, and the Nasdaq composite was up 1.3 percent.
The Australian share market is set to rise in the first session of the week following the King’s Birthday bank holiday, with futures pointing to a gain of 39 points, or 0.5 per cent, at the open at 5am (AEST). The Australian dollar was trading at 70.44¢.
Some of the best performers 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 much due to Artificial Intelligence 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 10.5 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 14.7 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 will 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 6.5 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 1 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.
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.
However, this later receded after the Iranian military said it had stopped offensive operations. The price of Brent last rose to $94.14 per barrel, up 1.1 percent compared to Friday.
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 were mostly flat after Friday’s jump. The yield on the 10-year Treasury note remained steady at 4.55 percent.
Indices on stock markets abroad fell in Europe following sharp losses in Asia.
Japan’s Nikkei 225 index fell 3.8 percent after the Japanese government cut the country’s annual economic growth rate to 1.8 percent in the first quarter of this year from a previous forecast of 2.1 percent.
Shares also fell 1.7 percent in Shanghai and 1.2 percent in Hong Kong.
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