Stan Choe
US stocks are rising and recovering some of their losses from a rare losing week.
The S&P 500 climbed 1 per cent after erasing a midmorning stumble and was on track to break a five-day losing streak. Itโs coming off just its second losing week in the last 13. The Dow Jones was up 296 points, or 0.6 per cent, and the Nasdaq composite was 1.8 per cent higher.
The Australian sharemarket is set to edge up, with futures at 5.02am AEST pointing to a gain of 10 points, or 0.1 per cent, at the open. The ASX added 0.7 per cent on Monday. The Australian dollar was trading at US68.88ยข.
Comcast helped lead the way on Wall Street and jumped 6.5 per cent after saying it will split off its NBCUniversal media business and Sky from its broadband and wireless business. Its stock came into the day with a loss of 17.3 per cent for the year so far.
Several stocks boosted by the artificial-intelligence boom also rose after Samsung Electronics and SK Hynix said they will invest roughly $US518 billion ($752 billion) in a new chipmaking hub in South Korea, as its president hopes to capitalise on surging AI demand.
Applied Materials, whose equipment helps make semiconductors, rallied 10.5 per cent to bring its gain for the year so far to roughly 170 per cent.
AI stocks have been on a roller-coaster ride recently after soaring to tremendous heights. Theyโre under pressure because of worries that their profits canโt possibly keep pace with the huge gains for their stock prices. And the drops have an outsized effect on investors because AI stocks have become some of Wall Streetโs largest and most influential, giving them more weight on indexes than others.
SpaceX, which owns the xAI business along with rockets, has already become worth more than $US2 trillion after its stock made its debut on the Nasdaq earlier this month, with sharp rises and falls along the way. Itโs become big enough that Nasdaq said Elon Muskโs company will join the Nasdaq 100 index before trading begins on July 7, which will force funds tracking the index to buy the stock.
SpaceX rose 3.7 per cent.
That helped offset a 5.6 per cent drop for Verizon Communications, which said itโs paying $US625 million as part of a deal to combine its international wireline connectivity and managed network services business with some of London-based BT Groupโs subsidiaries in a joint venture.
The gains for the stock market came even though oil prices rose. The price for a barrel of Brent crude, the international standard, climbed 2.1 per cent to $US74.09, pulling slightly above where it was before the war with Iran began. A barrel of benchmark US crude rose 2.4 per cent to $US70.92.
Following attacks across the Persian Gulf over the weekend, President Donald Trump said Monday on social media that Iran had requested a meeting with US counterparts, though one of Iranโs top negotiators said no further talks had been scheduled.
The hope is that an end to the war with Iran will give oil tankers full access again to the Strait of Hormuz, allowing them to exit the Persian Gulf and deliver crude to customers worldwide. That would help lower the price of oil, whose jumps because of the war have sent a punishing wave of inflation around the world.
If oil prices do recede and stay low enough, it could keep enough pressure off inflation to allow the Federal Reserve and other central banks to keep interest rates steady or even cut them instead of hiking them. Higher interest rates can keep a lid on inflation, but they also slow the economy and hurt prices for all kinds of investments. High yields worldwide have been rattling investors since oil prices burst above $US100 per barrel.
The yield on the 10-year Treasury edged down to 4.37 per cent from 4.38 per cent late Friday and from 4.56 per cent early this month.
In stock markets abroad, indexes were mixed across Europe and Asia.
Stocks jumped 1.6 per cent in Hong Kong and 1.2 per cent in Shanghai for two of the worldโs biggest gains, while South Koreaโs Kospi slipped 0.2 per cent.
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