NEW YORK — The U.S. stock market is rallying Monday and clawing back more of its big loss from last week as oil prices swing lower. The strength came even though Nvidia, one of Wall Street’s most influential stocks, sank.
The S&P climbed 1.9 per cent and was on track for a second straight gain following a wipeout on worries that Democratic victories in the U.S. midterm elections could mean a slowdown in the construction for AI data centres. Despite its manic recent swings, the main measure of Wall Street’s strength is sitting only 3.8 per cent below its all-time high set last month.
The Dow Jones Industrial Average was up 805 points, or 1.6 per cent, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 2.5 per cent higher.
Stocks got a lift from a 4.1 per cent drop for the price of a barrel of Brent crude to US$94.27. It’s been coming down from more than US$112 at the start of the month amid uncertainty about what will happen with the war with Iran.
The latest leg lower came after President Donald Trump told CNN over the weekend that a resumption of strikes is “highly unlikely” if the United States sees progress in negotiations, though U.S. Secretary of State Marco Rubio said Sunday that Iranian demands for ending the war had sometimes been “outrageous and ridiculous.”
Several strong profit reports from big U.S. companies also helped to lift the market.
Constellation Energy added 6.3 per cent after the power company reported both profit and revenue for the summer that topped analysts’ expectations. It’s been benefiting from deals announced recently to power data centres for Big Tech companies.
Those data centres, and the blame they’re getting from voters for increases in power bills, are coming under increased scrutiny following Democratic sweeps of statehouses in last week’s election. The worry is that governments could impose restrictions on the industry, which would fewer purchases of artificial-intelligence chips, electricity and other products and services around the AI industry.
Stocks linked to the AI build out were holding steadier on Monday. Advanced Micro Devices rose 9.5 per cent to recover some of its 11 per cent loss from last week. CoreWeave climbed 6.4 per cent after tumbling 15.4 per cent last week.
The stock that quickly became the face of the AI boom, Nvidia, fell 3.8 per cent. The chip company said it’s investigating its CEO, Jensen Huang, after he acknowledged an intimate relationship with a business executive who, according to The New York Times, U.S. intelligence determined was gathering information for China.
Nvidia’s board said it has “no reason to believe” that either national security or Nvidia secrets were compromised, but that its inquiry would examine all available information.
Guo Jiakun, spokesperson for China’s Ministry of Foreign Affairs, called the allegations “nothing but smears against China.”
In stock markets abroad, indexes were mixed in China amid mostly modest moves. Stocks rose 0.3 per cent in Shanghai and dipped 0.1 per cent in Hong Kong. Indexes were stronger in Japan, where the Nikkei 225 jumped 2.3 per cent, and in Europe, where France’s CAC 40 rose 1.2 per cent.
In the bond market, Treasury yields were holding relatively steady following big moves last week. The yield on the 10-year Treasury held at 4.86 per cent, where it was late Friday. It had topped 5.30 per cent last month and reached its highest level in two decades when worries were spiking about high inflation and the U.S. government’s big debt, among other things.
A pullback in Treasury yields should help pull down rates for mortgages and other kinds of loans. It also helps give prices a boost for stocks and other investments.
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Stan Choe, The Associated Press
AP Business Writers Michelle Chapman and Elaine Kurtenbach contributed to this report.
