NEW YORK (AP) — U.S. stocks were lower on Monday as shares of Wall Street giant Nvidia fell again, suppressing stock indexes.
The S&P 500 was down 0.1% in afternoon trading, further away from the record high it hit last week. The Dow Jones Industrial Average was up 238 points, or 0.6%, as of 2:04 p.m. Eastern time, while the Nasdaq Composite was down 0.8%.
Oil and gas company shares were the biggest gainers, with Exxon Mobil Inc. up 2.8% and oilfield services provider SLB Inc. up 4.1% as crude prices hovered near their highest levels since April.
The S&P 500 was weighed down by a 6.1% drop in Nvidia, as roughly 75% of the stocks in the index rose. The semiconductor company is headed for a third straight day of losses after soaring 1,000% since fall 2022. Nearly insatiable demand Nvidia’s chips Powering artificial intelligence applications It has become The big reason Despite slowing economic growth, the U.S. stock market has recently been breaking records. Weight slows it down High interest rates.
Markets are heading for records again. Associated Press business correspondent Seth Sutell has more.
The AI craze is so hot it’s raising concerns about a possible stock market bubble and inflated investor expectations. Nvidia, which briefly overtook Microsoft last week to become Wall Street’s most valuable company, is falling, marking its first losing week in nine weeks.
Nvidia has become so large that its stock price is Carrying extra weight It affected the S&P 500 and other indexes, with the biggest impact so far on the S&P 500 index on Monday.
RXO has since risen 22%. Agreement reached to acquire Coyote Logistics RXO acquired the freight brokerage business from UPS for about $1.03 billion. RXO said the acquisition would make it the third-largest brokered carrier in North America. UPS shares, which bought Coyote for $1.8 billion in 2015, rose 1.3%.
Under Armour reversed an initial loss to rise 1.6% in first trading after it said it agreed to pay $434 million to settle a lawsuit brought by shareholders related to its accounting and sales practices. The shoe and sportswear maker denied any wrongdoing in the settlement but also agreed to separate the roles of chairman and CEO for at least three years.
In the bond market, Treasury yields remained relatively stable. The 10-year Treasury yield fell to 4.25% from Friday’s close of 4.26%.
It has mostly fallen since hitting above 4.70% in late April, easing pressure on the stock market. Yields have been falling on expectations that inflation will slow enough that the Federal Reserve might decide to raise interest rates. lower key interest rates It’s scheduled for later this year.
The Federal Reserve has kept the federal funds rate at its highest level in more than 20 years, weighing on the economy. inflation Under control.
UBS economists led by Abigail Watt say Fed officials may be underestimating how much the U.S. economy is slowing. They see growth slowing to an annualized rate of less than 2% in the first half of 2024 from a 3.1% year-over-year expansion in the fourth quarter of 2023.
UBS economists say the bottom 40% of U.S. households have completely used up the savings they built up during and immediately after the pandemic and are now running out of savings. Slumping retail salesHow companies Low-income customers often struggle To continue.
Wall Street is indeed hoping for a slowdown in the economy, which would reduce upward pressure on inflation and pressure the Federal Reserve to cut interest rates. Goldman Sachs economist David Mericle said a cut could come as soon as September if inflation reports like the one due on Friday turn out as expected.
The Fed needs to cut rates at the right time: wait too long and the economic slowdown risks turning into a recession, cut too soon and inflation risks reviving.
Overseas stock markets saw stock indexes rise across much of Europe after mainly falling in Asia.
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AP writers Matt Ott and Jimmo Zhong contributed.
