The S&P 500 Index rose, erasing its early-session losses, as big banks and healthcare companies climbed. The tech-heavy Nasdaq 100 Index rebounded to a slight gain after South Korean neocloud company Elice Inc. tanked in its trading debut, spurring concern about the sustainability of the global AI boom that continued to weigh on the sector.
Investors are also on edge ahead of a spate of tech earnings this week, including SpaceX and Netflix Inc. after the bell.
The S&P 500 rose 0.4% as of 10:18 a.m. in New York, while Nasdaq 100 was up 0.2%. The benchmark KBW Bank Index rose 1.2%, with top lender JPMorgan Chase & Co. advancing more than 1%. Brent oil hovered around a five-month high, trading near $109 a barrel as traders weighed the threat of Iranian strikes hampering energy flows, adding to potential pressure on stocks as investors worry about inflation.
South Korean AI services firm Elice’s surprising 32% plunge raised doubts about AI valuations and recalled last week’s concern over neocloud company CoreWeave Inc., whose debt tumbled to levels that typically indicate distress.
See more: The Message From Market Breadth
“A prolonged deterioration in investor confidence” may be a bigger risk than CoreWeave’s ability to service existing obligations, BNP Paribas analysts Daniel Wang and Stefan Slowinski wrote in a Monday post-market note.
Earnings season is heating up, with investors watching for whether Netflix can stop a slide that’s erased more than $135 billion in market value this year. SpaceX fell 0.51% in Tuesday trading; the stock had closed 1.3% higher on Monday, after Elon Musk pledged to gift a share to each American child.
SpaceX’s outlook on AI will “matter more than the quarter,” Macquarie analyst Paul Golding wrote in a note, highlighting deals with AI startup Reflection, Anthropic PBC and Alphabet Inc.’s Google.
In single-stock trading, Apple Inc. dipped after Loop Capital Markets downgraded shares to hold from buy, citing iPhone shipment reductions.
Meantime, some are turning more bullish even as market pessimism has surged. Wells Fargo Securities’ sentiment indicator has triggered a buy signal, strategist Ohsung Kwon wrote in a note.
“Caution is warranted in a decelerating profits/negative liquidity environment, but sentiment may have gotten too bearish around AI financing, midterms, and Iran,” he said. Kwon anticipates a “choppy market into year-end.”
A message from Advisor Perspectives and VettaFi: Discover something new! Click here to register for our upcoming webcasts.
Bloomberg News provided this article. For more articles like this please visit bloomberg.com.
