Wall Street Recovers, AI Risks Not Yet Disappear
US stock markets rallied on Wednesday (June 24th) after oil prices fell and technology stocks began to rebound. The S&P 500 rose 0.4%, the Nasdaq Composite gained 0.5%, while the Dow Jones Industrial Average added around 90 points, or 0.2%. This increase indicates the market is beginning to recover after being pressured by a major sell-off in the technology and semiconductor sectors the previous day.
The decline in oil prices was one factor that helped market sentiment. Brent crude fell around 4% to US$73 per barrel, its lowest level since before the US and Israel launched airstrikes against Iran in late February. West Texas Intermediate, or WTI, also fell around 4% to US$70 per barrel. Falling energy prices helped ease inflation concerns, slightly easing pressure on Fed interest rate expectations.
Technology stocks also began to show a recovery after experiencing sharp pressure in the previous session. Micron rose around 2%, while SanDisk gained nearly 3%. Both stocks plummeted in Tuesday's trading, with Micron down around 13% and SanDisk also falling sharply. The DRAM memory ETF (DRAM) also began to rebound after previously falling due to concerns about AI chip demand.
Investors' primary focus is now on Micron Technology's earnings report, due after the market closes. This report is considered crucial because it could provide clues as to whether demand for memory chips and AI infrastructure remains strong enough to sustain the tech stock rally. If Micron's results and projections are solid, the market could view the previous correction as temporary profit-taking. However, if the results disappoint, pressure on chip stocks could renew.
Wednesday's movements followed significant pressure on Wall Street on Tuesday. Investors had previously dumped semiconductor-related stocks after doubts arose that tech companies' heavy spending on AI would generate profits as expected. The VanEck Semiconductor ETF (SMH) even closed down around 7%, reflecting broad pressure on the chip sector.
Going forward, Wall Street's direction will depend heavily on two key factors: Micron's results and oil price developments. If Micron signals that AI demand remains strong and oil prices continue to fall, the stock market has the potential to continue its rebound. However, if Micron's report disappoints or concerns about AI valuations resurface, the Nasdaq and tech stocks are still prone to volatility. (arl)
Source: Newsmaker.id
