Oil prices, stock markets worldwide hold steadier as AI stocks climb

New York, Jul 9 (AP) Wall Street and oil prices are holding steadier Thursday following their sharp swings the day before in the wait to see what will come next after President Donald Trump raised doubts about the temporary truce in the war with Iran. The S&P 500 rose 0.3 per cent, even though the United States launched new airstrikes against Iran, which responded by targeting US allies in the Middle East. The Dow Jones Industrial Average was down 47 points, or 0.1 per cent, as of 9:35 am Eastern time, and the Nasdaq composite was 0.5 per cent higher. In the oil market, prices edged lower following their spurts higher from the day before. The price for a barrel of Brent crude, the international standard, slipped 0.1 per cent to USD 77.94. That's down from USD 78.02 the day before but still above its USD 71.80 price at the end of last week. The worry is that a return to full-blown war will block oil tankers from the Strait of Hormuz and prevent the delivery of crude from the Persian Gulf to customers worldwide. That could worsen inflation, which economists expected would ease with oil prices, and in turn force the Federal Reserve and other central banks to raise interest rates. Higher rates can keep a lid on inflation, but they also slow the economy and hurt prices for all kinds of investments. But Trump also said Wednesday that the latest back-and-forth fighting would not result in “long-term” military action, raising uncertainty about just what will happen. The swings for oil prices have halted what had been a steady decline in gasoline prices, and the cost for a gallon climbed a nickel overnight, according to motor club AAA. The average price for a gallon of regular gasoline was USD 3.85 Thursday, up 69 cents from a year earlier. In the meantime, some renewed strength for computer chip companies and other winners of the boom around artificial-intelligence technology are helping to support stock markets worldwide. In South Korea, whose stock market is dominated by two companies that make semiconductors, the Kospi index rose 0.6 per cent after tumbling 5.3 per cent the day before. SK Hynix, which is preparing to sell shares of stock that will trade in the United States, jumped 5.3 per cent in Seoul. On Wall Street, Micron Technology's rise of 7.2 per cent was the strongest force pushing upward on the S&P 500. Close behind was the 3.5 per cent rise for Broadcom. Such stocks have become some of Wall Street's most influential after growing so big in the euphoria around AI. But AI stocks have also come pressure recently on worries that their prices shot too high and that AI may not produce enough productivity and profits to make all the investments in chips and data centres worth it. They and other stocks also got some help from stabilising yields in the bond market. The yield on the 10-year Treasury held at 4.56 per cent, where it was the day before. It had been climbing on worries about high oil prices and the potential for higher interest rates, cranking up the pressure on stocks and prices for other investments. Besides the war with Iran, another big event for Wall Street is the upcoming start of the latest earnings reporting season. Next week, the biggest banks are set to unveil how much profit they made from April through June. Companies broadly will need to report strong growth to justify the big moves their stock prices have made. PepsiCo fell 4.8 per cent even though it reported slightly better revenue for the latest quarter than analysts expected. Numbers released by the company behind Gatorade and Doritos showed weakening trends in its North American food and drinks businesses. In stock markets abroad, indexes rose across much of Europe and Asia. Besides Seoul's climb, stock indexes rose 1.7 per cent in Shanghai and 0.7 per cent in Paris. On the losing end was Hong Kong's Hang Seng, which slipped 0.7 per cent as shares of Apple supplier Luxshare fell 1.5 per cent in its trading debut. (AP) NPK NPK