Stan Choe
Oil prices are falling again, falling back below US$80 a barrel for the first time since early March, as the US stock market nears record highs.
The S&P 500 fell 0.3 percent following a rally that brought it back within 1 percent of its record set earlier this month. The Dow Jones Industrial Average was up 431 points, or 0.8 percent, and the Nasdaq Composite was down 0.6 percent.
The Australian share market is set for a strong start, closing at 4.59am AEST pointing to a 1 point gain at the open. Part of the ASX inches up on Tuesday. The Australian dollar was trading at US70.73¢.
As hopes persisted that a tentative agreement between the United States and Iran on their war would reopen the Strait of Hormuz by the end of the week and get global oil flowing again, the price of a barrel of Brent crude fell 5.4 percent to $78.69.
Major hurdles remain in the talks, including what to do with Iran’s nuclear program. But the hope on Wall Street is that this agreement will mean a long-term solution to the crisis that has fueled inflation around the world. Brent prices have fallen sharply from their $100-plus levels of the past few weeks, although it may take months for the energy industry to return to full speed.
On Wall Street, stocks benefiting from the rise of artificial intelligence technology were gaining ground following their negative swings over the past several weeks. They have been leading the market up and down amid concerns that their share prices rose too much, too quickly in the mania around AI. That has been affected because chip companies and other AI winners have grown so large that they have become some of Wall Street’s most influential stocks.
Drops of 1.4 percent for Nvidia and 3.7 percent for Micron Technology were among the heaviest drags on the S&P 500.
Robinhood shares fell 1.4 percent after the investment platform said in a regulatory filing that it is cutting about 10 percent of its full-time workforce, while Dave & Buster’s Entertainment fell 4.4 percent after reporting weaker-than-expected quarterly profit.
On the winning side of Wall Street was SpaceX, which rose 10.2 percent on its way to its third straight gain since it debuted on the US stock market. It said it is moving ahead with the purchase of Arrow, the popular AI writing assistant, valuing it at $60 billion ($84.8 billion).
Yum Brands rose 1.7 percent after it said it was selling the Pizza Hut chain for $2.7 billion. Most of the restaurants will go to LongRange Capital, a private equity firm. Those in mainland China will go to Yum China Holdings.
In stock markets abroad, indexes rose in Europe following a mixed performance in Asia.
Tokyo’s Nikkei 225 briefly topped 70,000 for the first time before ending with an average gain of 0.1 percent after the Bank of Japan raised its interest rate to 1 percent. That was its highest level in three decades, and it followed a similar move by the European Central Bank last week.
The Federal Reserve begins its own meeting on what to do with interest rates on Tuesday, with an announcement on the decision coming on Wednesday.
It will be the first meeting under the new chairman of the Fed, Kevin Warsh, who was appointed by President Donald Trump. Trump has been pushing for low interest rates, which would boost the economy but also threaten to worsen inflation. The widespread expectation, though, is that the Fed will leave its key interest rate alone again.
In the bond market, the yield on the 10-year Treasury fell to 4.42 percent from 4.47 percent late Monday and from 4.56 percent earlier this month.
High yields in bond markets around the world caused by high oil prices have threatened to slow the economy and reduce prices for all types of investments, including stocks and cryptocurrencies. Higher yields have already sent mortgage rates higher, and a report on Tuesday said construction workers broke ground on new U.S. homes in May more than economists expected.
AP
The Market Recap is a summary of the day’s trading. Let’s find each otherekday afternoon.
