Slumping AI Stocks and Rising Oil Prices Slow Wall Street's Record-Breaking Run

💡 Rising oil prices and slumping AI stocks have tempered Wall Street's record-breaking run.

The US stock market's record-breaking run has been slowed by a perfect storm of rising oil prices and slumping AI stocks. The S&P 500 has been on a tear in 2024, driven largely by the tech sector's rebound.

AI Stocks Slump

The NVIDIA ($NVDA) and Micron ($MU) stocks have taken a hit in recent weeks, with the former down 20% and the latter off 15%. The sector's woes have been exacerbated by a slowdown in demand for AI chips, which has led to a glut in inventory.

Oil Prices Rise

Meanwhile, oil prices have surged to a two-year high, fueled by a combination of supply disruptions and strong demand. The West Texas Intermediate (WTI) crude oil price has risen to $85 per barrel, its highest level since 2022.

Fed Signals Caution

The Federal Reserve has signaled caution, with Fed Chair Jerome Powell warning that the central bank is closely monitoring inflationary pressures. The 10-year Treasury yield has risen to 4.2%, its highest level since 2023.

What It Means for Investors