Wall Street's Record Run Pauses Amid AI Stock Declines and Rising Oil Prices
U.S. stock markets experienced a downturn as technology stocks declined and oil prices surged, halting Wall Street's record-setting streak.
U.S. stock markets experienced a downturn on Tuesday, with the S&P 500 falling 0.2% to 7,400.96 and the Nasdaq Composite dropping 0.7% to 26,088.20, both retreating from their record highs set the previous day. In contrast, the Dow Jones Industrial Average edged up 0.1% to 49,760.56.
The decline was primarily driven by a pullback in technology and AI-related stocks. Intel's shares fell 6.8%, while Micron Technology and CoreWeave saw declines of 3.6% and 6.1%, respectively. This trend began earlier in Asian markets, where South Korea's Kospi index dropped 2.3% amid concerns over potential government redistribution of AI windfall profits.
Adding to market pressures, Brent crude oil prices surged 3.4% to $107.77 per barrel due to escalating tensions in the U.S.-Iran conflict, which has disrupted oil shipments through the Strait of Hormuz. This increase in oil prices contributed to higher-than-expected U.S. inflation figures for April, raising concerns about potential Federal Reserve interest rate hikes.
Despite these challenges, some companies reported positive earnings. Zebra Technologies exceeded analysts' expectations, leading to an 11.4% rise in its stock price. Conversely, Under Armour reported a larger-than-expected quarterly loss, resulting in a 17% decline in its shares.
Global markets also faced declines, with European indexes and South Korea's market posting notable losses.