AI Stocks Whipsaw Markets Worldwide    07/17 10:26

   More swings for computer chip companies and other winners of the 
artificial-intelligence boom are pulling stock markets in their wake Friday. 
Oil prices, meanwhile, continue to climb because of the war with Iran.

   NEW YORK (AP) -- More swings for computer chip companies and other winners 
of the artificial-intelligence boom are pulling stock markets in their wake 
Friday. Oil prices, meanwhile, continue to climb because of the war with Iran.

   The S&P 500 fell as much as 1.4% at the start of trading before trimming its 
loss to 0.6%. It's on track for its first losing week in the last three and 
only its third since March, just a couple days after it climbed within 0.5% of 
its all-time high.

   The Dow Jones Industrial Average was down 25 points, or less than 0.1%, as 
of 10:30 a.m. Eastern time, after veering between an early loss of 566 points 
and a modest gain. The Nasdaq composite fell 1.3%.

   Chip stocks once again were at the center of the shakiness. They've been 
under pressure for weeks on worries that their prices shot too high and that 
voracious demand for computer memory and processors may be unsustainable if AI 
ends up producing less profit and productivity than promised.

   Applied Materials sank 4.6% to trim its surge for the year so far to 108%. 
Micron Technology dropped nearly 6% in the first 15 minutes of trading, but it 
quickly erased its loss and then rose 1.6% to help the market trim its losses.

   Earlier in the morning, tech sold off worldwide. Indexes tumbled 6.5% in 
Taipei, 4% in Tokyo and 3% in Shanghai as stocks like Taiwan Semiconductor 
Manufacturing Co. dropped 7.3%.

   South Korea's stock market was closed for a holiday, offering some respite, 
if only temporary. It's been at the center of the AI swings because it's 
dominated by two huge tech companies, Samsung Electronics and SK Hynix. This 
past week alone, Seoul's Kospi stock index had one day where it surged 6.2% and 
two others where it sank 6.4% and 8.9%.

   News of a Chinese open-sourced AI model by startup Moonshot, Kimi K3, 
further shook markets. Similar to when China's DeepSeek announced its AI model 
in early 2025, another low-cost rival to big Western AI models like ChatGPT and 
OpenAI could potentially hurt demand for computer chips and other components.

   European stock indexes, which have less of an emphasis on AI and tech, had 
milder moves.

   Adding to the pressure on Wall Street Friday were drops for several stocks 
following their latest earnings reports. It's a departure from much of the rest 
of the week, when companies like Goldman Sachs and BlackRock jumped after 
delivering better profits for the spring than analysts expected.

   Netflix sank 8.6% after its revenue for the latest quarter fell just short 
of analysts' expectations, even though its profit was bigger than expected. Its 
forecasts for upcoming revenue and profit in the summer also fell below 
expectations.

   Intuitive Surgical, a maker of robotic surgical systems, dropped 11.1% 
despite topping expectations for the latest quarter. Analysts pointed to 
worries about slowing procedure growth because of the expiration of enhanced 
tax credits that helped lower the cost of health insurance for many Affordable 
Care Act enrollees.

   Elon Musk's SpaceX fell 4.2% and touched its lowest level since its stock 
began trading on the Nasdaq just over a month ago. The owner of the xAI 
business has been swept up in the swings of AI stocks, and it had to abort a 
test flight of its mega Starship rocket Thursday within a second or so from 
blasting off.

   More climbs for oil prices also pressured the stock market.

   The price for a barrel of Brent crude, the international standard, rose 3.3% 
to $86.91, up from roughly $76 a week ago.

   Oil prices are near their highest levels in a month because of worries that 
the war with Iran will keep oil tankers out of the Strait of Hormuz and block 
shipments of crude from the Persian Gulf to customers worldwide. The United 
States expanded its airstrike campaign against Iran early Friday by hitting 
more bridges and collapsing a tower at a key Iranian port.

   High oil prices have sent Treasury yields higher in the bond market, which 
threaten to slow the economy and undercut prices for stocks and all kinds of 
other investments. Higher yields have already sent the average 30-year mortgage 
rate to its highest level in nearly a year.

   But Treasury yields eased Friday. The yield on the 10-year Treasury fell to 
4.52% from 4.57% late Thursday.

   A report suggested sentiment among U.S. consumers is improving more than 
economists expected, while expectations for upcoming inflation eased. That's 
important for the Federal Reserve, which is considering hikes to interest rates 
to keep a lid on inflation. If expectations for inflation remain anchored, it 
would prevent a vicious cycle where people make moves in anticipation of higher 
inflation, which only worsens it.

   The preliminary reading from the University of Michigan's survey for U.S. 
consumer sentiment hit its highest reading since February. But much of the rise 
was due to recent drops for prices at gasoline pumps, according to Joanne Hsu, 
director of the survey. If gasoline prices rise again because of crude's recent 
rally, the improvement could be under pressure.