U.S. stocks gave up gains and turned down; the sell-off in chip stocks overshadowed the easing of tensions between the U.S. and Iran
A sell-off in chip stocks dragged U.S. stocks lower, erasing earlier gains on lower oil prices. Tensions in the Middle East have eased, and the market expects the United States and Iran to resume diplomatic efforts, pushing crude oil prices lower. As of press time, the S&P 500 index fell 0.2%. The 100 Index fell 1% and the Dow Jones Industrial Average rose 0.4%. An index measuring chip giants fell 4.4% amid worries about whether huge investments in artificial intelligence will pay off. NVIDIA is advancing a new round of artificial intelligence infrastructure transactions, with a potential scale that may exceed US$750 billion, significantly increasing its debt default protection costs. ASML's share price plummeted. Concerns about technology stocks are heating up again as a number of major technology companies are about to report earnings, overshadowing optimism caused by falling energy costs. The United States and Iran refrained from launching an attack for a third straight night, giving Wall Street some breathing space. U.S. Permanent Representative to the United Nations Mike Waltz said on Sunday that President Donald Trump was "leaving some room" for diplomacy. He also said that the two sides are continuing to contact each other at the technical and leadership levels. "We don't think the Fed will raise rates," said Evercore's Krishna Guha. "Given that June inflation data were better than expected and there is a smoother path to raising rates in September if needed, it would be unusual to raise rates immediately at this time." This week's earnings call will undoubtedly focus on whether the surge in artificial intelligence investments will provide adequate returns amid a still-unstable geopolitical landscape. As related expenses continue to rise, it is increasingly difficult for companies to please investors. Although Alphabet reported solid results last week, its stock price plummeted immediately after the release of the earnings report due to an increase in capital expenditures. This makes the market and Meta Platforms Inc. Results are announced on Wednesday, and It faces a tougher test ahead of Thursday's earnings release.