US equities opened mixed on Monday, with the Dow Jones Industrial Average slipping 167 points (0.3%) while the Nasdaq Composite edged into positive territory, buoyed by renewed enthusiasm for artificial intelligence. The S&P 500 dipped 0.12%, hovering near last week's record close, as investors weighed upbeat AI sentiment against rising oil prices and persistent geopolitical risks.
AI optimism lifts chip stocks
Technology shares outperformed after reports of robust revenue growth at Anthropic, the AI company reportedly preparing for an initial public offering. Reuters, citing sources familiar with its financials, indicated that Anthropic expects revenue of roughly $190 billion to $200 billion by 2028. Bloomberg separately reported that second-quarter revenue exceeded $11.5 billion. These figures helped lift sentiment across the AI supply chain, with Micron Technology climbing more than 4% and Nvidia edging higher after a report that it scaled back support for a proposed OpenAI data center in Ohio. Amazon slipped, while Apple posted modest gains.
The strength follows a period of concern over the returns on massive AI investments, but strong quarterly results and resilient demand forecasts have helped restore confidence. Investors now look ahead to Nvidia's earnings next week for further evidence that AI infrastructure spending remains robust.
Fed rate hike odds fade, supporting growth stocks
Recent economic data has also improved the outlook for growth-oriented equities. Softer inflation figures and an unexpected decline in July retail sales have reduced expectations for a Federal Reserve rate increase in September. According to CME FedWatch, traders now price in roughly a 31% probability of a 25-basis-point hike next month, down sharply from near-even odds a week earlier. Lower rate expectations tend to benefit technology shares, which are particularly sensitive to interest-rate changes.
Fed Chair Kevin Warsh has not provided forward guidance on the next policy decision, leaving investors to parse upcoming data. The Federal Reserve is scheduled to release minutes from its latest meeting on Wednesday, which could offer further clues. The earnings season is nearing its end, with 453 S&P 500 companies having reported; about 84.8% have beaten analysts' estimates, according to LSEG IBES data.
Oil prices climb on Middle East tensions
Geopolitical risks remain a counterweight to AI and rate optimism. Oil prices rose after an Iranian official warned that tensions in the Strait of Hormuz and the broader region could escalate if diplomacy with the US fails. West Texas Intermediate futures gained nearly 1% to around $83 a barrel, while Brent crude advanced about 1% to roughly $89. Higher energy costs keep inflation concerns in focus, particularly as the Fed weighs its next move.
Investors are also monitoring the impact of elevated oil prices on consumer spending and corporate margins. The combination of AI-driven tech strength and energy-driven inflation pressures creates a mixed backdrop for the broader market.
For more on the latest market moves, see Nasdaq futures climb on fading hike odds and Micron's surge on AI memory demand. Also, check US tightens Iran sanctions and cooling PPI lifts chip stocks.
This article is for informational purposes only and does not constitute financial advice.
