NEW YORK (AP) — U.S. stocks rose Monday amid fragile trading in financial markets around the world, as AI stocks continued to fluctuate and Brazilian stocks fell.
The S&P 500 rose 0.7% and more than recovered its last week’s lossesapproaching to 1.8% of its record level set earlier this month. The Dow Jones Industrial Average added 146 points, or 0.3%, and the Nasdaq composite climbed 0.8%.
The biggest gain in the market came from Nvidia, which rose 2.4%. That helped the chipmaker recoup some of its decline after three straight weeks of losses, its longest such streak since June.
But stocks elsewhere in the artificial intelligence the industry remained unstable. They were swerve on concerns over whether their industry’s boom is under threat due to how expensive it has become for businesses to borrow money to build data centers and buy more AI chips.
AP AUDIO: US stocks climb amid shaky trading in global markets
Stocks are recovering their losses from last week ahead of the release this week of a number of results from major companies, including Amazon and Intel.
Meta helps direct the swings
Meta platforms have rebounded after announcing plans to raise $35 billion by selling shares to help pay for their AI investments. It also said it could raise another $60 billion by selling shares of a new class of its stock once it begins trading. Meta’s stock initially fell more than 2%, but quickly returned to a gain, then fell back to a 1.9% loss.
Meta said Nvidia, Advanced Micro Devices and Broadcom have already indicated they could buy a total of $5 billion in shares in its offering. These are strong signals of interest from chipmakers who stand to benefit from additional investments in AI. But they also fuel criticism of “circular financing,” which says it increases risks if AI does not achieve the expected success.
A big company at the center of the AI boom, Anthropicgave details Monday about how much money it is losing as it prepares to sell its shares on the U.S. public market for the first time.
Concerns remain over borrowing for AI
SpaceX, Elon Musk’s rocket company that also runs the xAI business, saw similar developments after announcing a roughly $40 billion deal with an entity managed by Apollo Global Management to lease AI computing power. Its stock first fell by almost 2% before experiencing a gain of 1.9% then ending with a drop of 0.4%.
Musk warned over the weekend that hundreds of companies that lease AI computing power are at risk because of the difficulty in borrowing money, saying on his social media platform X that they could face “guppy-level death and consolidation.”
CoreWeave, a company that borrowed money to buy AI computing power that it rents to customers via the cloud, has been the focus of investor concern in recent weeks. On Monday, it fell 5.5% quickly after early trading, only to post a 6.6% gain before moderating to a 1.8% rise. Such minute-to-minute fluctuations have become commonplace in recent days.
Overall, the S&P 500 rose 53.09 points to 7,676.77. The Dow Jones Industrial Average rose 146.42 to 52,361.58, and the Nasdaq composite climbed 214.04 to 26,169.38.
It’s a big week for earnings reports
Earnings reports from big tech companies this week could offer more details on how AI spending is evolving and whether it is producing the profits and productivity promised by AI advocates.
Alphabet and Microsoft will report their latest quarterly results on Wednesday, and Amazon will follow on Thursday.
Companies across all sectors are under pressure to report strong profit growth. Expectations of strong growth are what have allowed stock prices to hit record highs recently, despite worries about high inflation, high interest rates and other worries.
Verizon Communications fell 3.5% even though it reported higher summer profit than analysts expected as its revenue fell short of forecasts.
About one in three S&P 500 stocks are expected to report their latest quarterly results this week.
Brazilian stocks fall following mixed moves in other markets
In foreign stock markets, Brazilian stocks fell sharply after President Luiz Inácio Lula da Silva was re-elected in a result that surprised investors.
Investors worry that he could increase government spending and put more pressure on its debt. Brazil’s Bovespa stock index fell 13.7%.
Other governments around the world are also under pressure due to high debt and strained budgets, including the United States. France has been at the center of concern recently following violent demonstrations in the country.
But French government bond yields eased on Monday and the CAC 40 stock index rose 0.8%, one of the best moves in the world. Indices also rose in other European markets after a mixed result in Asia.
The European Central Bank and the Bank of Japan will meet to vote on interest rates later this week.
Yields fall ahead of Federal Reserve meeting
In the US bond market, yields on long-term Treasury bills fell. The yield on the 10-year Treasury note fell to 4.98%, down from 5.00% late Friday and above 5.30% earlier this month.
The two-year Treasury yield rose from 4.69% to 4.71% Friday evening. It is more closely tracking expectations for the Federal Reserve’s action on overnight interest rates, and it is widely expected to say on Wednesday that it is leaving the federal funds rate alone after its latest meeting.
The Fed last month we raised the federal funds rate for the first time in three years, in the hope of slowing inflation, which has remained much higher than we would like.
Oil prices fluctuate
The price of a barrel of Brent oscillated between gains and losses throughout the day before settling at $110.74, down 0.9%. It remains close to the top of the range since the war with Iran began. The highest price of the most actively traded Brent crude contract on the market since then is almost $120, reached in March.
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AP Business Writers Michelle Chapman and Elaine Kurtenbach contributed to this report.
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