AI stocks lift S&P 500 as market shows mixed performance

AI-focused equities provided a boost to Wall Street on Monday, lifting the S&P 500 by 0.5% even as most of its components declined. The Nasdaq Composite advanced 1.1% by mid-morning, while the Dow Jones Industrial Average slipped 0.3% (160 points).

The sector’s recent volatility stems from concerns that AI-related valuations may have surged beyond sustainable levels, prompting questions about whether investment in AI chips and data-center capacity can generate sufficient productivity and profit gains.

Broadcom rallied 5.3%, emerging as a key driver of the S&P 500’s gain after rebounding from losses earlier in the week. Micron Technology added 4.2% to the upward momentum.

Investor appetite for AI will be tested later this week when South Korean memory maker SK Hynix seeks to raise $28 billion through a U.S. Nasdaq listing, one of the largest offerings in recent history. SK Hynix’s Seoul-listed shares have more than tripled this year, though they have experienced sharp recent declines, including a 14.6% drop on Thursday.

SpaceX, the owner of the xAI venture, saw its stock rise 1.2% in its final trading day before joining the Nasdaq-100 index, a move that will require index-tracking funds such as the QQQ ETF to purchase the shares.

In related AI news, TeraWulf jumped 12.5% after announcing a 20-year agreement with Anthropic to use its Kentucky data centre, a deal projected to generate about $19 billion in revenue as the company shifts from bitcoin mining to high-performance computing.

Oil prices were largely unchanged after OPEC+ announced an additional 188,000 barrels per day of production for August, marking the fifth consecutive month of output increases. Brent crude edged up 0.1% to $72.22 a barrel, near levels seen before the February attacks on Iran.

U.S. Treasury yields eased slightly, with the 10-year rate falling to 4.48% from 4.49% on Thursday. A Institute for Supply Management survey indicated that growth in recreation, finance and other services matched expectations, and some firms reported lower gasoline and diesel prices, easing inflation pressures.

International markets showed modest declines across most of Europe and Asia, while Hong Kong’s Hang Seng index rose 1.1%.