US stocks drift as oil falls and Wall Street waits for SpaceX's debut
NEW YORK (AP) — U.S. stocks are drifting Friday after oil prices fell again and as Wall Street waits for the highly anticipated debut of SpaceX coming later in the day. It’s the first of three gargantuan companies in the artificial-intelligence industry expected to start selling their shares on the U.S. market, and it could show how hungry investors still are for AI stocks following vicious swings and big doubts for them over the last week.
The S&P 500 rose 0.1%. The Dow Jones Industrial Average was up 270 points, or 0.5%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.1% lower.
Stocks got a lift from a 2.2% drop for the price of Brent crude oil to $88.36 per barrel, deepening its loss for the week. Oil prices have come down since President Donald Trump on Thursday called off his threat to launch strikes on Iran and said a potential deal with Iran may be imminent.
A deal to end the war could reopen the Strait of Hormuz and allow oil tankers to once again deliver crude from the Persian Gulf to customers worldwide. Its near closure since the war began has sent the price of Brent up from roughly $70 per barrel and caused a wave of painful inflation for the world.
Of course, financial markets have rallied in the past on hopes that an end to the war with Iran was near, only to get disappointed each time.
The bigger factor for Wall Street over the last week has actually been AI stocks, and how they have gone from roaring to records to suddenly turning lower. The concern is whether such stocks shot too high, too fast because of AI mania, and their careening moves have sometimes reversed direction by the hour.
Several headed back down the roller coaster Friday following Thursday’s climb. Micron Technology fell 2%, and Broadcom slipped 0.8%.
Some of the pressure on AI stocks may be coming from investors pulling their money out in hopes of moving it to SpaceX and other big AI-related initial public offerings.
SpaceX’s stock is set to begin trading on the Nasdaq later in the day for the first time. Elon Musk’s rocket company also has big investments in AI, part of the reason it has built up $29.1 billion in debt, as of the end of March. It’s unknown exactly what time SpaceX’s stock will begin trading.
If SpaceX shares hold at their offering price, the company’s market value would be $1.77 trillion. That would put it close to Broadcom and Meta Platforms, the sixth and seventh most valuable companies on Wall Street.
In the bond market, Treasury yields rose to regain some of their sharp slides the day before, when oil prices dropped following Trump’s announcement. The yield on the 10-year Treasury climbed to 4.48% from 4.45% late Thursday.
High yields can slow entire economies and undercut prices for all kinds of investments, including stocks and cryptocurrencies. They hit investments seen as the most expensive in particular, and some critics are calling the AI industry a bubble where investment inflated too far.
In stock markets abroad, indexes rallied as they caught up to Thursday’s big gains on Wall Street.
South Korea’s Kospi jumped 4.6% and trimmed its losses from earlier this month taken because of sell-offs for AI-related stocks. The Kospi has nearly doubled since the start of the year.
Tokyo’s Nikkei 225 rose 2.8%, and France’s CAC 40 climbed 1.8% for two of the world’s bigger moves.
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AP Business Writers Chan Ho-him and Matt Ott contributed to this report.
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