Wall Street Ends Lower as Oil Surge Revives Persistent Inflation Fears
Wall Street indexes dropped as rising oil prices reignited inflation fears, while tech stocks like Intel and CoreWeave posted gains amid AI enthusiasm and supply updates.
Wall Street trading sessions ended in negative territory as Middle East developments and a sharp spike in oil prices thrust persistent inflation concerns back into the spotlight. Investors now worry that surging energy costs will complicate the Federal Reserve's path toward interest rate cuts and could even force policymakers to consider further tightening.
The Dow Jones Industrial Average dropped by about 1%, the S&P 500 lost 0.6% to mark its second consecutive day of losses, and the Nasdaq edged down by 0.3%. Alongside equity sell-offs, yields on US government bonds registered an increase.
Energy Markets and Tech Exceptions
Brent crude traded around $98 a barrel, extending its gains following reports of explosions near the mooring area of Kharg Island in Iran.
Despite the negative market sentiment, several technology stocks stood out with gains. Intel advanced following a report that it is considering another price hike of approximately 10% on its processors later this year. If implemented, this would mark the company's third price increase this year, aimed at bolstering profit margins rather than pursuing market share expansion.
Intel stock received further support after Northland Securities analyst Gus Richard upgraded his rating from "Hold" to "Outperform" and assigned a price target of $120.
Companies tied to artificial intelligence also drew significant attention. CoreWeave surged by about 15%, alongside Lumentum and Coherent, which supply optical equipment and laser technologies to data centers. These gains were driven by market enthusiasm surrounding Astra, the new model from OpenAI.
Corporate Partnerships and Healthcare Setbacks
Qualcomm drew attention after revealing a partnership with Amazon to develop specialized artificial intelligence chips for its data centers. Under the agreement, Amazon received warrants to purchase up to 25 million shares of Qualcomm, with vesting contingent on future purchase volumes that could reach $60 billion.
«Under the agreement, Amazon received warrants to purchase up to 25 million shares of Qualcomm, with vesting contingent on future purchase volumes that could reach $60 billion.»
In contrast, pharmaceutical and medical device stocks suffered heavy losses. Amgen tumbled by more than 9% and Novartis plunged following the failure of a clinical trial for an experimental heart disease drug. Boston Scientific and Stryker also declined after reporting that separate cyberattacks disrupted product supply and sales, with impacts potentially lasting for months.
