U.S. equities rose as investors gained optimism surrounding artificial intelligence despite concerns over inflation, rising Treasury yields and geopolitical tensions.
On Monday, the S&P 500 rose 0.7%, the Dow Jones Industrial Average increased 0.2% and the Nasdaq Composite gained 1.1%. Technology stocks climbed as Nvidia shares surged 2.1%, while Microsoft rose 1.5%.
On Tuesday, the Dow gained 0.5%, while the S&P 500 and the Nasdaq reached record closing highs, climbing 0.6% and 0.45%, respectively.
However, the stock market pulled back on Wednesday. The S&P 500 slipped 0.2%, the Dow fell 0.7% and the Nasdaq dipped by 0.2%.
The 10-year Treasury yield reached 5.364%, its highest level in 24 years, before easing back down following a $39 billion treasury auction, which drew more buyers than expected.
Minutes from the Federal Reserve September meeting showed that most officials expected another rate hike before the year end, which would keep borrowing costs high across the board.
U.S. stocks were mixed on Thursday as technology shares slid up. The Nasdaq declined 1.3%, while the Dow edged up 0.1% and the S&P 500 fell 0.47%. Nvidia shares fell 2.9% and Micron Technology lost 4.8%.
The drop followed reports that OpenAI is expected to generate $20 billion less in annual revenue than anticipated. If AI companies make less money, they may purchase fewer chips to develop their technology, creating a contractionary ripple effect.
Brent crude jumped from 4.1% to land at $104.28 per barrel amid uncertainty over the war in Iran. Rising oil prices increase transportation and production costs, adding to inflation concerns.
On Friday, Wall Street rebounded as the Dow gained 0.8%, the S&P 500 and the Nasdaq rose 0.6%.
Delta Airlines cut its 2026 profit forecast as fuel costs rose, a sign that high oil prices are beginning to shrink the company’s profits. “All of it’s fuel,” Chief Financial Officer Erik Snell said in a press release when asked what drove the forecast cut.
The airline expects to spend about $6 billion more on fuel this year.
Telecommunications stocks sank after SpaceX announced plans to buy nationwide wireless spectrum, allowing the company to have complete phone coverage across America. T-Mobile shares plunged 13.3%, while AT&T fell 9.8% and Verizon dropped 8.8%, marking Verizon’s worst performance since 2002.
Oil prices also retreated after President Donald Trump announced the U.S. would not launch additional strikes against Iran before the November midterm elections.
For the week, the S&P 500 gained 1.2%, the Dow rose 0.9% and the Nasdaq added 0.6%.
Looking ahead, investors will be watching September’s inflation report. Should prices rise faster than anticipated, then another Fed rate hike becomes more likely. If prices cool, stocks and bonds could climb.
