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NEW YORK \u2014 The U.S. stock market rallied Monday and recovered most of its big loss from last week as oil prices swung lower. The strength came even though Nvidia, one of Wall Street\u2019s most influential stocks, sank. <\/p>\n
The S&P 500 jumped 2.3 per cent for a second straight gain following a wipeout on worries that Democratic victories in the U.S. midterm elections could lead to a slowdown in the construction of AI data centres. The best day for the index since April has it sitting just 3.4 per cent below its all-time high set last month. <\/p>\n
The Dow Jones Industrial Average leaped 1,104 points, or 2.2 per cent, and the Nasdaq composite rose 2.7 per cent.<\/p>\n
Stocks broadly got a lift from a 5.8 per cent drop for the price of a barrel of Brent crude to US$92.57. It\u2019s been coming down from more than US$112 at the start of the month amid uncertainty about what will happen with the war with Iran.<\/p>\n
The latest leg lower came after President Donald Trump told CNN over the weekend that a resumption of strikes is \u201chighly unlikely\u201d if the United States sees progress in negotiations, though U.S. Secretary of State Marco Rubio said Sunday that Iranian demands for ending the war had sometimes been \u201coutrageous and ridiculous.\u201d<\/p>\n
Several strong profit reports from big U.S. companies also helped lift the stock market. <\/p>\n
Constellation Energy climbed 10.5 per cent after the power company reported both profit and revenue for the summer that topped analysts\u2019 expectations. It\u2019s been benefiting from deals announced recently to power data centres for Big Tech companies. <\/p>\n
Those data centres, and the blame they\u2019re getting from voters for increases in power bills, are coming under increased scrutiny following Democratic victories in statehouses across the country in last week\u2019s election. The worry is that governments could impose restrictions on the industry, which would mean fewer purchases of artificial-intelligence chips, electricity and other products and services around the AI boom.<\/p>\n
That built on top of worries already rattling the industry that further construction of AI data centres may slow because of how expensive it\u2019s become to borrow money. Before that, even, critics were saying AI stock prices had shot too high and were in a bubble. <\/p>\n
Beyond power companies, other stocks linked to the AI build out also did better on Monday. Advanced Micro Devices rose 13.3 per cent and recovered its 11 per cent loss from last week. CoreWeave climbed 5.6 per cent after tumbling 15.4 per cent last week.<\/p>\n
That\u2019s even though the stock that became the face of the AI boom, Nvidia, fell 4.3 per cent. The chip company said it\u2019s investigating its CEO, Jensen Huang, after he acknowledged an intimate relationship with a business executive who, according to The New York Times, U.S. intelligence determined was gathering information for China.<\/p>\n
Nvidia\u2019s board said it has \u201cno reason to believe\u201d that either national security or Nvidia secrets were compromised but that its inquiry would examine all available information. <\/p>\n
Guo Jiakun, spokesperson for China\u2019s Ministry of Foreign Affairs, called the allegations \u201cnothing but smears against China.\u201d<\/p>\n
All told, the S&P 500 rallied 173.08 points to 7,549.94. The Dow Jones Industrial Average jumped 1,104.02 to 52,389.75, and the Nasdaq composite leaped 673.71 to 25,253.14.<\/p>\n
In stock markets abroad, indexes rose across much of Europe and Asia. France\u2019s CAC 40 rose 1.2 per cent, while Japan\u2019s Nikkei 225 jumped 2.3 per cent. Indexes in China and South Korea were not as strong, and Seoul\u2019s Kospi fell 0.8 per cent. <\/p>\n
In the bond market, Treasury yields held relatively steady following big moves last week. The yield on the 10-year Treasury inched up to 4.87 per cent from 4.86 per cent late Friday. <\/p>\n
It remains well below a peak above 5.30 per cent that it reached last month, when it touched its highest level in two decades on worries about high inflation and the U.S. government\u2019s big debt, among other things. The pullback in Treasury yields over the last month has helped rates for mortgages and other kinds of loans to ease. It also gave a boost to prices for stocks and other investments. <\/p>\n
___<\/p>\n
Stan Choe, The Associated Press<\/p>\n
AP Business Writers Michelle Chapman and Elaine Kurtenbach contributed to this report.<\/p>\n
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