Rebounding AI stocks send the S&P 500 within 1% of its record

NEW YORK (AP) — A rebound for AI stocks lifted the U.S. market on Monday.

The S&P 500 rose 0.7% and pulled back within 1% of its all-time high, even though the majority of stocks within the index fell. The strength for companies in the artificial-intelligence technology industry sent the Nasdaq composite 1.1% higher, and the Dow Jones Industrial Average rose 155 points, or 0.3%, to a record.

AI stocks have swung sharply in recent weeks on worries that their prices shot too high. Doubts are rising about whether all the dollars flowing into AI chips and data centers can possibly create enough gains in productivity and profits to make back all the investments.

Broadcom was one of the strongest forces lifting the S&P 500 and rose 3.7% after announcing long-term agreements to provide silicon products to Apple. It was coming off two straight losses of more than 2% on Wednesday and Thursday at the end of last week, before Friday’s holiday in advance of the Fourth of July.

The global appetite for AI from investors will face an additional test later this week when SK Hynix, the South Korean maker of computer memory, plans to raise $28 billion by selling shares of stock that will trade in the United States on the Nasdaq. That would make it one of the biggest U.S. offerings ever, behind SpaceX’s IPO from last month, which raised $75 billion.

SK Hynix’s stock in Seoul has already more than tripled so far this year because of the AI boom, but its day-to-day swings have included sharp losses in recent weeks. It fell 14.6% on Thursday alone, for example.

SpaceX, which owns the xAI business, has seen its stock likewise swing following its ballyhooed initial public offering.

It erased an early gain to fall 1% in the last day of trading before it’s scheduled to join the Nasdaq 100 index of the largest non-financial stocks on the Nasdaq. That inclusion will force funds like the QQQ exchange-traded fund, which mimic the index, to buy SpaceX themselves.

Elsewhere in AI, TeraWulf climbed 4.9% after it said Anthropic agreed to a 20-year deal to use its data center in Kentucky. TeraWulf expects the deal to bring in roughly $19 billion in revenue. TeraWulf is in the midst of transitioning its business away from mining bitcoin and into high-performance computing.

All told, the S&P 500 rose 54.19 points to 7,537.54. The Dow Jones Industrial Average added 155.84 to 53,055.91, and the Nasdaq composite rallied 288.49 to 26,121.16.