NEW YORK — The U.S. stock market is drifting in mixed trading on Wednesday as technology stocks keep swinging.
The S&P 500 was virtually flat after recovering from an early loss of 0.8%, and it may avoid its first back-to-back drop in three weeks. The Dow Jones Industrial Average was down 268 points, or 0.5%, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 0.1% lower.
Wall Street has been shaky since last week, when stocks swept up in the artificial-intelligence boom went from roaring to records to suddenly turning lower. Among the worries is that their prices have simply shot too high, too fast because of AI mania.
Super Micro Computer, which sells AI servers, tumbled 14.1% after saying late Tuesday that it plans to raise $7 billion in cash by selling shares of stock and convertible preferred stock. Such moves raise the most money for companies when their stock prices are high, and they can dilute the ownership stakes of existing shareholders.
But other AI stocks yo-yoed. Micron Technology went from an early loss of nearly 4% to a gain of 1.1%. It's coming off a wild stretch where it sank 7.7% last Thursday, then plunged another 13.3% Friday and rallied 9.9% Monday. Despite all the swings, the computer memory maker's stock is still up 231.2% for the year so far.
Stocks of companies whose products and services help to make semiconductors accelerated through the morning and led the market. Gains of 5.9% for KLA and 6% for Applied Materials were two of the strongest forces pushing upward on the S&P 500.
Stocks broadly got a bit of a boost from an update on U.S. inflation that arrived before trading began.
While the report said inflation accelerated to its highest level in three years, the numbers were pretty much exactly what economists had forecast. The rise in an important underlying measure of inflation, meanwhile, was not as bad from April through May as economists expected.
That helped Treasury yields ease a bit in the bond market, which in turn relaxed some of the pressure that’s built up on the stock market.
High bond yields can slow entire economies and undercut prices for all kinds of investments, including stocks and cryptocurrencies. They particularly hit investments seen as the most expensive, and some critics are calling AI a bubble where investment inflated too far.
The yield on the 10-year Treasury fell to 4.52% from nearly 4.55% earlier in the morning. The two-year Treasury yield, which more closely tracks expectations for what the Federal Reserve will do with its overnight interest rates, edged down to 4.11% from 4.13% just before the report.
Traders have been building bets recently that the Fed will have to hike its main interest rate at least once this year, given how high inflation is and how strong the U.S. job market remains. Wednesday's inflation update caused them to trim their bets by a smidgen, according to data from CME Group.
Keeping things uncertain are continued swings for crude oil prices, which have been rising and falling with hopes that the United States and Iran can reach a deal to reopen the Strait of Hormuz to oil tankers.
The price for a barrel of Brent crude oil rose 1.3% to $92.60 after President Donald Trump warned Iran would "pay the price" for stalled negotiations between the two on their war.
In stock markets abroad, indexes in Europe pared their losses following sharper drops in Asia.
South Korea’s Kospi tumbled 4.5%, hurt by losses for tech giants Samsung Electronics and SK Hynix.
Tokyo’s Nikkei 225 sank 1.9% after data showed Japan’s producer price index, a measure for prices at the wholesale level, rose in May at the fastest pace in more than three years. Shares of technology and telecommunications giant SoftBank Group, which has a strong AI focus, lost 8.3%.
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AP Business Writers Chan Ho-him and Matt Ott contributed to this report.
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