More drops for tech stocks weigh on Wall Street
Summary
Technology stocks fell again on Wall Street, causing the main stock index, the S&P 500, to decline for the second day in a row. This drop followed recent large gains in artificial intelligence (AI) stocks, which investors now worry may have grown too quickly. Inflation data matched expectations and helped ease some losses.Key Facts
- The S&P 500 index dropped 0.6%, with the Dow Jones down 314 points (0.6%) and the Nasdaq down 0.8% early in trading.
- AI-related stocks had strong gains recently but started to decline last week due to concerns their prices rose too fast.
- Super Micro Computer’s stock fell 13.5% after announcing plans to raise $7 billion by selling new shares, which can reduce current shareholders’ ownership.
- Micron Technology’s stock dropped 2.8%, reducing its year-to-date gains from nearly 280% to about 218%.
- The U.S. inflation rate rose to the highest level in three years, as expected by economists.
- A key measure of underlying inflation slowed more than forecast in May, helping reduce some pressure on stocks.
- Treasury bond yields fell slightly after the inflation report, easing concerns about higher borrowing costs.
- Oil prices rose 1.1% after President Donald Trump warned Iran over stalled negotiations affecting shipping through the Strait of Hormuz.
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