US stocks opened lower on Tuesday as selling resumed in artificial intelligence-linked companies, reversing some of the previous session's gains, while surging crude oil prices added to investor concerns over energy supplies and inflation.
The Nasdaq Composite fell 0.t%, while the S&P 500 declined 0.2%. The Dow Jones Industrial Average traded around 0.08% higher, showing relative resilience as technology stocks came under pressure.
Chipmakers led the declines. Micron Technology, Intel and Sandisk fell around 2% each, while Seagate Technology and Advanced Micro Devices lost more than 1%. The VanEck Semiconductor ETF (SMH) also declined by more than 1%, while CoreWeave shed over 3%.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
The pullback followed a broadly positive session on Monday, when the S&P 500 gained 0.4% and the Nasdaq Composite advanced more than 1%. Nvidia rose 1.4%, Tesla jumped 3.8% and Alphabet added about 1%.
The latest declines reflect lingering concerns about the scale of investment required to build artificial intelligence infrastructure and whether companies borrowing heavily to finance their expansion will generate sufficient returns.
Last week's sell-off spread beyond individual technology stocks as investors reassessed the financial risks associated with AI-related capital expenditure. Tuesday's weakness suggests that Monday's rebound has not fully eased those concerns.
READ | Crude Oil Prices At Five-Month High On Supply Concerns; Brent Oil Near $110 A Barrel
CoreWeave, which fell more than 25% last week, attempted to recover some of its losses after Goldman Sachs upgraded the stock to buy. However, the early gains faded, and the shares ended the session slightly lower.
Investors have increasingly focused on the cost of building data centres and computing infrastructure, along with the debt and financing commitments involved. Companies' ability to convert AI demand into sustainable revenue and profits remains a key consideration for the sector.
The renewed pressure on semiconductor stocks also weighed on the broader technology market, although the Dow's relative stability indicated that selling was not uniform across the market.
Brent Crude Climbs To Five-Month High On Iran Concerns
Oil prices added another source of uncertainty for investors as escalating tensions involving Iran threatened energy shipments through the Strait of Hormuz.
Brent crude climbed to around $112 per barrel before paring some gains, reaching its highest levels since May. The global benchmark has risen as traders assess the risk of further Iranian attacks on tankers and disruptions to energy flows through the Persian Gulf.
Iranian attacks on shipping in the region have reportedly become more frequent and damaging, raising concerns that fewer tankers could remain available to transport crude oil.
Iran's First Vice President Mohammad Reza Aref said on Monday that Tehran had "no choice" but to assert control over the Strait of Hormuz to safeguard its security, according to a report by state-run news agency IRNA.
The strait is one of the world's most important energy chokepoints, making any prolonged disruption a concern for oil-importing economies and global markets.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
