US Stocks Slip After Oil Prices Turn Upward Again | LatestLY
U.S. stocks edged lower Thursday as a rebound in oil prices reignited pressure in the bond market and cooled recent optimism on Wall Street. The S&P 500 fell 0.4% and was on track for its fourth decline in five sessions after recently setting a record high. As of 9:35 a.m. Eastern, the Dow Jones Industrial Average was down 253 points, or 0.5%, and the Nasdaq composite slipped 0.4%.
Much of the market’s momentum this year has hinged on enthusiasm for artificial intelligence, but the surge in AI-linked shares has taken a breather. Even another standout quarter from a leading chipmaker wasn’t enough to lift the broader market at the open. The company reported profit and revenue that topped forecasts and projected stronger sales for the current quarter, citing a rapid, large-scale expansion of AI-focused infrastructure worldwide. Its stock swung between losses and gains before ticking up 1.1% as investors weighed lofty expectations against the urge to take profits after a powerful run over the past year.
Some market watchers suggested the restrained reaction was partly due to profit-taking: the stock had rallied nearly 70% over 12 months, far outpacing the S&P 500’s roughly 27% gain. More broadly, the AI trade has drawn criticism for steep valuations and concerns about feedback loops, as major chip suppliers invest in companies that, in turn, are key customers for their products.
Oil Rebound Lifts Yields, Pressures Stocks
Energy markets added to the cautious tone. Brent crude jumped 3.4% to $108.54 per barrel, recovering much of its week-to-date decline. Oil prices have been volatile amid uncertainty around how long disruptions tied to conflict in the Middle East will persist, including restrictions affecting the Strait of Hormuz that are slowing crude shipments from the Persian Gulf.
Fresh labor data also pointed to surprising resilience in the U.S. job market. New filings for unemployment benefits fell unexpectedly last week, signaling fewer layoffs. Together with higher oil, the report helped push Treasury yields back up, reversing part of the prior session’s retreat. Globally, bond yields have been grinding higher on worries that elevated energy costs could keep inflation stubborn, weigh on growth, and pressure valuations for stocks and other risk assets.
Higher yields tend to ripple through the economy by lifting borrowing costs, from mortgages to corporate debt. That could dampen investment plans, including spending on AI data centers that have helped underpin recent economic and market strength. The 10-year Treasury yield rose to 4.61% from 4.57% late Wednesday.
Corporate Movers
Walmart fell 5.9% after its latest results. While the retailer posted another quarter of solid revenue, its profit outlook came in softer than analysts anticipated. The company has attracted customers seeking value as inflation squeezes budgets, a trend that has intensified since late February alongside broader geopolitical strains.
Overseas Markets
European benchmarks dipped, following sizable gains in parts of Asia. South Korea’s Kospi surged 8.4%, powered by technology shares. Samsung Electronics climbed 8.5% after management and labor reached a late Wednesday agreement that avoided a strike, while SK Hynix jumped 11.2% amid ongoing enthusiasm for AI memory demand.
Japan’s Nikkei 225 advanced 3.1% as April exports rose nearly 15% year over year, showing resilience despite regional shocks. In contrast, Hong Kong’s market fell about 1%, and Shanghai slipped roughly 2%.
Big Picture
With oil rebounding and bond yields rising again, equity markets are grappling with the twin headwinds of inflation concerns and higher financing costs. While standout performances from leading AI names continue to support sentiment, the broader market appears more sensitive to macro signals, especially those tied to energy and the labor market. Investors will be watching whether cooling enthusiasm for high-growth tech and costlier capital reshapes the leadership that has driven major indexes to recent highs.
