NEW YORK (AP) — Wall Street’s artificial intelligence sector clawed back some of its brutal losses Monday, yet global markets remained on edge as borrowing costs stayed near historic highs.
The S&P 500 gained 0.5% after suffering its worst week since June. The tech-heavy Nasdaq composite jumped 1%. But the Dow Jones Industrial Average slipped 76 points, or 0.1%, by 9:35 a.m. Eastern time, signaling weakness beyond AI names.
European indexes fell more than 1% across the board. Paris dropped 1.6% following violent protests over the weekend that could force governments to increase spending and strain already stretched bond markets. Germany’s DAX lost 1.4%, while London’s FTSE 100 slid 1.3%.
Yields on French bonds climbed sharply as investors questioned the government’s budget plans. The gap between French and German borrowing costs widened considerably, with Germany still seen as the safer bet.
AI stocks have driven market gains for years. That momentum reversed last week when Treasury yields hit their highest levels since 2002, raising questions about the debt-fueled AI spending boom. Much of the money behind AI chips and data centers comes from borrowed funds, and higher rates make that financing far more expensive.
CoreWeave, which borrows to buy AI chips and rents them out over the cloud, rose 3.2% Monday after losing more than a quarter of its value last week. Nvidia added 0.8% and remained the strongest single force lifting the S&P 500 given its massive market capitalization.
SpaceX, which controls the xAI business, climbed 2.3%. Founder Elon Musk pledged Monday to give one share of SpaceX to “every kid in America” next year. The announcement followed Anthropic’s weekend declaration that it would commit 5% of shares in its upcoming IPO to a new public benefit fund.
Meta Platforms and Lam Research both report quarterly results Wednesday, with investors looking for evidence that AI spending remains robust.
Expectations run high. Analysts forecast 29% profit growth for S&P 500 companies compared with the prior summer, according to FactSet. Cleveland-Cliffs jumped 12.5% after beating profit expectations, with CEO Lourenco Goncalves citing improved selling prices, volumes, and unit costs.
South Korea’s Kospi rebounded 1.8%, recovering part of last week’s 14.5% plunge. Samsung Electronics and SK Hynix, both deeply tied to AI, dominate that index and amplified its volatility.
The 10-year Treasury yield edged up to 5.10% from 5.09% late Friday. It topped 5.30% earlier this month.
