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U.S. stocks are drifting Monday ahead of a week packed with potentially market-moving events. The areas of the bond market that the U.S. Treasury Department is trying to calm down, meanwhile, eased a bit.
The S&P 500 slipped 0.3% and pulled a bit further from its all-time high set earlier this month. The Dow Jones Industrial Average was up 49 points, or 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.6% lower.
Tech stocks led the way downward following big swings through the summer on worries that the frenzy around artificial-intelligence technology sent prices too high and that the huge demand for AI chips won’t be sustainable if they don’t produce enough profits.
Chip giant Nvidia has been a tremendous winner of the AI boom and become Wall Street’s largest and most influential stock because of it. It will deliver its latest quarterly earnings report on Wednesday, which could dictate the next big move for AI-related stocks.
Nvidia slipped 0.7% and was one of the heaviest weights on the S&P 500, where the majority of stocks were rising. Drops of 5.5% for Micron Technology and 1.5% for Broadcom also helped drag the index lower.
The other big factor moving stocks recently has been the bond market, where longer-term Treasury yields climbed through the summer on worries about high inflation, huge government debts and other factors. High yields make it more expensive for everyone to borrow, not just the government, and have already been pushing up mortgage rates and hurting the housing industry.
The U.S. Treasury Department announced a surprise move last week to increase the size of planned buybacks of Treasurys, which could help ease the rise in yields for 10- and 30-year Treasurys. But analysts warned the move could have only a limited effect because of how small the size of the buybacks are and how they do not fix the fundamental problems of too-high debt for the U.S. government and expensive oil prices because of the war with Iran.