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Stock market today: Asian stocks follow Wall Street rise, but Nvidia tumbles again as AI mania cools

The Associated Press

HONG KONG (AP) — Asian stocks rose Tuesday after another slide for Wall Street heavyweight Nvidia kept U.S. indexes mixed Monday, even as the majority of stocks rallied.

U.S. futures were higher while oil prices were little changed.

Japan’s benchmark Nikkei 225 added 0.5% to 39,001.39 after data from the Bank of Japan Tuesday showed the services producer price index in May was up 2.5% compared to the same period last year, a slowdown from the 2.7% increase seen in April.

The Japanese yen remains a focus of attention, with the US dollar to Japanese yen exchange rate still trading near its weakest level in approximately 34 years. The yen rose to 159.37 to the dollar in Tuesday morning trading. The dollar closed at 159.59 yen on Monday.

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The Hang Seng in Hong Kong was 0.5% higher to 18,121.78 and the Shanghai Composite index dipped 0.3% to 2,954.51.

Australia’s S&P/ASX 200 gained 0.9% to 7,799.20. In South Korea, the Kospi climbed 0.5% to 2,777.69.

Elsewhere, Taiwan’s Taiex lost 0.3%, while the SET in Bangkok edged 0.1% higher.

The S&P 500 slipped 0.3% to 5,447.87. The drops for Nvidia and other winners of Wall Street’s artificial intelligence boom pulled the Nasdaq composite down 1.1% to 17,496.82, while the Dow Jones Industrial Average rose 0.7% to 39,411.21.

Stocks of oil and gas companies were among the market’s strongest, as seven out of every 10 stocks in the S&P 500 rose. Exxon Mobil climbed 3%, and oilfield services provider SLB gained 4% as oil prices hung near their highest levels since April.

Financial companies were also strong. JPMorgan Chase added 1.3%, and Wells Fargo climbed 1.6% ahead of results coming later in the week for tests by the Federal Reserve of how big banks would fare in a recession.

But declines for a handful of high-profile stocks offset all of those gains, and the spotlight shone brightest on Nvidia’s 6.7% tumble. It was a third straight drop for the chip company, which had rocketed 1,000% higher since the autumn of 2022.

The nearly insatiable demand for Nvidia’s chips to power artificial intelligence applications has been a big reason for the U.S. stock market’s record runs recently, even as the economy’s growth slows under the weight of high interest rates. But the AI boom has been so frenzied that it’s raised worries about a possible bubble in the stock market and too-high expectations among investors.

Nvidia’s stock has been receding since it briefly overtook Microsoft as Wall Street’s most valuable last week, and it’s down nearly 13% in just three days. Because Nvidia has become so massive in size, the movements for its stock carry extra weight on the S&P 500 and other indexes. It was the heaviest weight by far on the S&P 500 Monday.

Other AI beneficiaries also gave up some of their fantastic gains. Super Micro Computer dropped 8.6% to shave its gain for the year so far back below 200%, down to 190.9%.

Such a rotation among stocks could be a healthy sign for the market, as long as it can stay close to its records. Market watchers have been worried to see just Nvidia and a handful of other companies responsible for much of the S&P 500’s returns recently. They would prefer a market where many stocks are participating in the gains.

In the bond market, Treasury yields eased a bit. The yield on the 10-year Treasury fell to 4.23% from 4.26% late Friday.

It’s been mostly falling since topping 4.70% in late April, which has relaxed the pressure on the stock market. Yields have sunk on hopes that inflation is slowing enough to convince the Federal Reserve to cut its main interest rate later this year.

The Fed has been keeping the federal funds rate at the highest level in more than 20 years, hoping to grind down on the economy just enough to get inflation under control.

In other dealings Tuesday, U.S. benchmark crude oil gave up 1 cent to $81.62 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude lost 2 cents to $85.13 per barrel.

The euro rose to $1.0736 from $1.0732.

Zimo Zhong, The Associated Press