Bargain buyers and falling oil prices are causing recovery on Wall Street after recent losses. Even if the indices stabilize, the unrest is not over.
Street sign on Wall Street. Photo: dpa
Dusseldorf. Wall Street is recovering from last week's selloff. On Monday, all four major US indices rose significantly.
The index of the Nasdaq technology exchange is trading at 25,232 points, up 2.6 percent.
The Nasdaq 100, which tracks the 100 largest non-financial companies with the highest market capitalization, is also increasing and is up 3.2 percent at 27,866 points.
The broader S&P 500 also advanced 2.4 percent to 7,552 points.
The Dow Jones index of standard stocks is 2.2 percent higher at 52,417 points.
This means that prices are stabilizing after last week's swings. Within two days, the mood had changed: confidence after the midterm elections in the USA and falling crude oil prices was followed by concerns about artificial intelligence (AI). In Germany, too, the Dax fell by up to 1,000 points just 24 hours after its record high.
The recovery in oil prices supported markets on Monday. There was renewed hope among investors that the Iran war would be resolved soon. US President Donald Trump has described new attacks on Iran as very unlikely as long as talks to end the conflict continue.
A barrel (159 liters) of Brent oil for delivery in January costs $93.51 on Monday, around 4.9 percent less.
Andreas Lipkow, chief market analyst at CMC Markets, sees the continued decline in energy prices as support for the price recovery on Wall Street. “They reflect the hope that the conflict in the Middle East could be at least temporarily defused,” says Lipkow.
In addition, investors on Wall Street are using the price losses from last week to get back into the market. Bargain hunters came to the market on Friday and made purchases to ensure recovery, says Thomas Altmann, portfolio manager at QC Markets. Now more follow-up buyers are needed. “What is now crucial for the stock markets is whether Friday’s recovery proves to be stable,” says Altmann.
US stocks
Buy or sell? This is how experts assess the market turbulence
“But the markets are not out of the woods yet,” warns Kyle Rodda, senior financial market analyst at capital.com. “The movement was just a small countermovement to the sell-off.” Because there is a realization that the Democrats – as winners of the midterms – could slow down the expansion of the data centers pushed forward by US President Donald Trump.
However, according to Ulrike Hoffmann-Burchardi from the UBS Chief Investment Office, the recent sell-off in technology stocks was a readjustment of positioning and not the start of a structural downturn in the AI investment cycle. However, the recovery does not eliminate the risks caused by concentrated positioning and excessive expectations.
AI companies open the books – Nvidia scandal in focus
In the current stock market week, investors are looking forward to upcoming business figures from AI companies. Coreweave, Applied Materials and Cisco, among others, are opening their books. Investors are hoping for prospects for the technology sector and whether the recent decline in prices could continue.
Investors are also focusing on Nvidia. The chip company initiated an investigation against its CEO Jensen Huang on Sunday (local time) on suspicion of espionage. The affair with a suspected Chinese spy is putting the co-founder of the $4.5 trillion company under increasing pressure. Some analysts now see Huang's position in jeopardy. Analysts also assume that the investigation into the scandal could weigh on the shares for a while.
Nvidia is investigating CEO Jensen Huang's affair with a suspected Chinese spy. The tech company's shares fell significantly in early trading. The major US indices, however, rose. Markus Koch analyzes what is happening on the stock market.
Huang admitted on Sunday evening to an affair with a suspected Chinese agent after initially denying it. After the start of trading, the shares were temporarily eight percent in the red. This means the company will lose around $350 billion in market value.
Other chip stocks, however, are rising on Wall Street. Broadcom is growing by over eight percent, Advanced Micro Devices even by over ten percent.
