S&P 500 Wobbles as AI Angst Offsets Oil Decline: Markets Wrap
(Bloomberg) — A selloff in chipmakers sent stocks wavering, offsetting a decline in oil prices, as pressure keeps building for the biggest spenders on artificial intelligence to justify their investments.
While most S&P 500 shares rose, the index was little changed. A gauge of semiconductor giants fell 2.2%. The cost of protecting Nvidia Corp.’s debt against default surged amid a round of AI deals worth more than $750 billion. SK Hynix Inc. slipped below its US initial public offering price. ASML Holding NV sank on a report that a Chinese state-backed firm is producing certain chipmaking machines that could threaten its sales.
Those concerns emerged ahead of results from a handful of megacaps, keeping a lid on equities. Brent crude settled around $88 as the US held off attacking Iran for a third straight day. Bond yields dropped, with inflation fears easing in the countdown to the Federal Reserve decision.
“This is a week with more than its fair share of potential surprises, good and bad,” said Chris Larkin at E*Trade from Morgan Stanley. “Geopolitics and oil prices may be the biggest wild cards, but a bullish response to strong Magnificent Seven earnings isn’t a given, especially if AI spending levels continue to raise eyebrows.”
The Fed is expected to leave rates unchanged on Wednesday, but the possibility of a hike is higher than it’s been in a while, he noted. That means: Choppy trading could persist, Larkin concluded.
On the geopolitical front, President Donald Trump said the US and Iran were engaged in diplomatic talks to end their conflict, but warned the two sides would return to fighting if negotiations didn’t yield a deal.
“The only reason they want to meet is because we’ve been hitting them very hard,” Trump told reporters. “There’s a good chance that something could happen. If it doesn’t, we go back to doing what we were doing.”
Separately, Iran and Oman are trying to reach an agreement to restart shipping through the Strait of Hormuz, according to people familiar with the matter.
“In yet another example of where stocks are headed once the Iran conflict is over, a suspension of attacks over the weekend has pushed crude oil prices lower, and interest rates are following,” said veteran strategist Louis Navellier. “That implies further equity upside when the conflict is fully over.”
JPMorgan Chase & Co.’s market intelligence desk led by Andrew Tyler said its tactical positioning monitor is pointing to “material upside” for the S&P 500, while flagging risks stemming from crowded positions in semiconductor stocks and the Iran war.
Still, the team continues to be “tactically bullish,” anticipating US equities will benefit from lower bond yields, a weaker dollar and strong corporate earnings.
Corporate Highlights:
Nvidia Corp.’s partnership with SK Group unveiled late Friday means the companies will be doing more than $500 billion in business with each other, it said. The firm is also in talks to backstop as much as $250 billion to help OpenAI lease computing power from a US data center project. Nvidia has committed to invest $5 billion in Ilya Sutskever’s Safe Superintelligence Inc., according to people familiar with the matter. Paramount Skydance Corp. Chief Executive Officer David Ellison said he’s “highly confident” in a planned $110 billion takeover of Warner Bros. Discovery Inc. despite legal challenges. Jersey Mike’s Subs Inc.’s initial public offering has attracted investor demand for more than 10 times the available shares ahead of pricing on Wednesday, according to people familiar with the matter. Sarepta Therapeutics Inc. appointed former AbbVie Inc. executive Michael Severino its new chief executive officer, tapping the long-time pharmaceutical executive to lead the company as it seeks to recover from a period of clashes with US regulators. CXMT Corp. surged 466% in its Shanghai trading debut to become China’s largest onshore-listed company, as investors piled into one of the country’s biggest AI champions. Some of the main moves in markets:
Stocks
The S&P 500 was little changed as of 4 p.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average rose 0.5% The MSCI World Index rose 0.1% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1372 The British pound fell 0.3% to $1.3291 The Japanese yen was little changed at 163.74 per dollar Cryptocurrencies
Bitcoin rose 0.5% to $64,889.31 Ether rose 1.7% to $1,944.3 Bonds
The yield on 10-year Treasuries declined three basis points to 4.65% Germany’s 10-year yield declined four basis points to 3.13% Britain’s 10-year yield declined four basis points to 5.00% Commodities
West Texas Intermediate crude fell 8.4% to $81.77 a barrel Spot gold rose 0.7% to $4,082.16 an ounce ©2026 Bloomberg L.P.
