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US Stocks Higher as Oil Prices Ease 10/26 09:44
U.S. stock indexes are ticking higher Monday ahead of a week full of reports
that could move the market.
NEW YORK (AP) -- U.S. stock indexes are ticking higher Monday ahead of a
week full of reports that could move the market.
The S&P 500 rose 0.4%, coming off a second straight losing week, and pulled
closer to the all-time high it set earlier this month. The Dow Jones Industrial
Average was up 216 points, or 0.4%, as of 9:35 a.m. Eastern time, and the
Nasdaq composite was 0.3% higher.
Stocks got some breathing room after the price for a barrel of Brent crude
fell 1.2% to $110.31. It's still near the high end of its range since the war
with Iran began, which clogged the global flow of oil. The highest price that
the most actively traded contract in the market for Brent crude has reached
since then is nearly $120 in March.
Stocks in the artificial-intelligence industry remained unsettled, though.
They've been swerving on worries about whether the boom for their industry is
under threat because of how expensive it's become for companies to borrow money
to build data centers and buy more AI chips.
Nvidia rose 1.7% and was the single strongest force lifting the S&P 500 on
Monday. That helped the chip company recover some of its losses from three
straight losing weeks, its longest such streak since June.
But Meta Platforms fell 1.7% after outlining plans to raise $35 billion by
selling stock and preferred stock to help pay for its AI investments. It also
said it could raise another $60 billion by selling shares of a new class of its
stock that has zero voting rights, once it begins trading.
SpaceX, Elon Musk's rocket company that also runs the xAI business, slipped
0.4% after it agreed to a roughly $40 billion deal to lease AI computing power
with an entity managed by Apollo Global Management.
Musk warned over the weekend that hundreds of companies that rent out AI
computing power are under threat because of an inability to borrow more money,
saying on his social-media platform that they could face "guppy-level death and
consolidation." Musk and xAI could benefit if such a prediction were to come
true, and several "neocloud" companies that rent out AI processing power sank
sharply.
CoreWeave fell 4%, and Nebius Group's stock that trades in the United States
sank 4.6%
Profit reports from several huge tech companies this upcoming week could
offer more details about how spending on AI is going, and whether it's
producing the profits and productivity that proponents promised.
Alphabet will report its latest quarterly results on Wednesday, and Amazon
and Intel will follow on Thursday.
Companies across all industries are under pressure to report strong growth
in their profits. Expectations are high for them, which is what allowed their
stock prices to run to records recently despite worries about high inflation,
high interest rates and other concerns.
Verizon Communications fell 2.7% even though it reported a stronger profit
for the summer than analysts expected, as its revenue fell short of forecasts.
Roughly one out of every three stocks in the S&P 500 is scheduled to report
its latest quarterly results this week.
In the bond market, Treasury yields eased. The yield on the 10-year Treasury
fell to 4.97% from 5.00% late Friday and from more than 5.30% earlier this
month.
The two-year Treasury yield also fell, but not by as much. It more closely
tracks expectations for what the Federal Reserve will do with overnight
interest rates, and the widespread expectation is that it will say Wednesday
that it is leaving the federal funds rate alone following its latest meeting.
The Fed last month hiked the fed funds rate for the first tie in three years
in hopes of slowing inflation, which has remained much higher than anyone would
like.
In stock markets abroad, indexes rose in Europe following a more mixed
finish in Asia. South Korea's Kospi fell 1.5%, and Germany's DAX rose 1% for
two of the world's bigger moves.
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