AI stocks lead rebound; European markets drop
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NEW YORK -- Stocks in the artificial-intelligence industry bounced back on Wall Street Monday and recovered some of their steep losses from last week, but the rest of the market and stocks worldwide were shaky.
The S&P 500 rose 0.4%, coming off its worst week since June, and the Nasdaq composite rallied 1.1% because it's full of technology stocks. The majority of U.S. stocks outside of AI and tech fell, though, and the Dow Jones Industrial Average swung between losses and gains before finishing with a drop of 36 points, or 0.1%.
In Europe, the losses were sharper, and indexes slid more than 1% following violent protests that could ultimately force the French government to increase its spending to ease voters' anger. That in turn could put even more pressure on bond markets, and yields cranked higher worldwide.
Even with all the cross currents flowing through financial markets, AI stocks stood out, as they have for most of the past few years. A frenzy in spending for AI technology has forced them to the forefront of the market, sending them to record prices and driving indexes higher. Last week, AI stocks grabbed the spotlight after tumbling on worries about how expensive it has become to borrow money, which could threaten the boom.
Much of the spending on AI chips and data centers has come from borrowed money, and Treasury yields in the bond market have recently hit their highest levels in years or even decades. That has raised the cost of borrowing money for everyone.
Nvidia added 1.4% Monday and was one of the strongest forces lifting the S&P 500. Because it's the largest stock on Wall Street by total market value, a 1% move for its stock has more effect on the index than any other's.
SpaceX, which controls the xAI business, rose 1.3% to $147.96. Its founder, Elon Musk, pledged on Monday to give one share of SpaceX to "every kid in America" next year. The offer came after Anthropic said over the weekend that it will commit 5% of the shares in its highly anticipated initial public offering of stock to a new "public benefit" fund.