Oil Prices Rise, AI Stocks Fall Monday 07/13 15:23

   Oil prices jumped Monday following a weekend of attacks in the Middle East, 
while more losses for computer chip companies and other winners of the 
artificial-intelligence boom dragged stock markets lower.

   NEW YORK (AP) -- Oil prices jumped Monday following a weekend of attacks in 
the Middle East, while more losses for computer chip companies and other 
winners of the artificial-intelligence boom dragged stock markets lower.

   The price for a barrel of Brent crude oil, the international standard, 
climbed 9.6% to $83.30 after the United States and Iran each said the Strait of 
Hormuz is under its control. Fighting in the region has kept oil tankers from 
using the strait to deliver crude to customers from the Persian Gulf, which 
drives up fuel prices worldwide.

   The gains for oil prices accelerated immediately after President Donald 
Trump said he's reinstating a blockade to prevent tankers carrying Iranian oil 
from using the strait. He also called for 20% payments on all cargo shipped 
through it to reimburse the United States for providing protection in the area.

   Brent's price, though, remains well below its wartime peak of nearly $120 
per barrel for its most actively traded contract.

   On Wall Street, the S&P 500 fell 0.8%, coming off its fourth winning week in 
the last five. The Dow Jones Industrial Average dropped 138 points, or 0.3%, 
and the Nasdaq composite sank 1.6%.

   Chip stocks like Micron Technology helped lead the way lower. Micron fell 
4.4%, eating into what had been a stellar rise of 243.1% for the year so far.

   Real profits are behind the rise because the AI rush has created surging 
demand for computer memory and other computing building blocks. But worries are 
rising that stock prices have shot too high and that the demand may not be 
sustainable if AI doesn't deliver as much profit and productivity as expected.

   Nvidia fell 3.5%. Because it's the largest stock on Wall Street by value 
thanks to the euphoria around AI, it was the single heaviest weight on the S&P 
500.

   The day's losses began in Asia, where South Korea's Kospi index dropped 
8.9%. That included a 15.4% plunge for SK Hynix's stock in Seoul, the worst 
since it began trading in 1997.

   The South Korean tech giant just launched shares of its stock trading in the 
United States on Friday, raising roughly $26.5 billion. Those shares jumped 
13.1% in their first day of trading, but they fell 9.3% Monday.

   Other areas of the AI industry held up a bit better, and Taiwan 
Semiconductor Manufacturing Co.'s shares in Taiwan rose 1%. The chipmaker said 
its revenue in June soared nearly 68% from a year earlier, bringing its total 
revenue growth for the first half of the year to 35.6% from a year earlier.

   But TSMC's stock that trades in the United States fell 2.9% later in the day.

   All told, the S&P 500 fell 60.06 points to 7,515.34. The Dow Jones 
Industrial Average dropped 138.37 to 52,498.64, and the Nasdaq composite sank 
408.43 to 25,873.18.

   Much of Wall Street's attention this week will be on profit reports from 
companies saying how much they earned during the spring. On Tuesday alone, Bank 
of America, Citigroup, JPMorgan Chase, Goldman Sachs and Wells Fargo are all 
releasing their latest quarterly results.

   Analysts are forecasting that companies in the S&P 500 index will deliver 
overall growth of 23.6% from a year earlier, according to FactSet. If they're 
right, it would be the second straight quarter of growth better than 20%.

   Companies across industries will need to deliver strong growth to justify 
the big moves their stock prices have made. Indexes are near records despite 
their sharp recent swings due to worries around AI stocks.

   Companies usually turn in results that top analysts' expectations, including 
in 37 of the past 40 quarters, according to FactSet. If they do so again by the 
usual margin, earnings growth for S&P 500 companies in the latest quarter could 
end up being the best since 2021.

   In the bond market, Treasury yields rose with the price of oil. The yield on 
the 10-year Treasury climbed to 4.61% from 4.56% late Friday and from just 
3.97% before the war with Iran began.

   Yields have risen worldwide on worries about expensive oil and high 
inflation, which could push the Federal Reserve and other central banks to 
raise interest rates. Higher rates can keep a lid on inflation, but they also 
slow the economy and hurt prices for all kinds of investments.

   In stock markets abroad, indexes moved modestly in Europe.

   In Asia, the swings were sharper, beyond South Korea's plunge. Stocks fell 
2.1% in Shanghai, and Japan's Nikkei 225 dropped 1.9%