WSJ- US tech stocks regained their footing on July 28 as a sell-off in chip stocks underscored concerns about AI circular financing deals, countering a drop in oil prices.
- The Nasdaq Composite bounced back from earlier losses to hover near the flat line on July 28.
- On July 28, the S&P 500 rose nearly 0.4%, while the Dow Jones Industrial Average climbed 1.2% as investors weighed the latest quarterly results.
- Investors are closely watching SK Hynix's results due around 8 p.m. ET for insight into the memory trade as AI worries swirl.
- Nvidia is reportedly exploring a $250 billion funding backstop for OpenAI, further intertwining the two companies and heightening worries about circular financing.
- Tech traders are growing nervous that Chinese competition is narrowing the AI gap with US companies, undermining prospects for a payoff.
The Nasdaq Composite bounced back from earlier losses, reflecting a recovery in US tech stocks despite a sell-off in chip stocks. The S&P 500 rose nearly 0.4%, while the Dow Jones Industrial Average climbed 1.2% as investors digested quarterly results.123
Concerns about AI circular financing deals were highlighted by reports that Nvidia is exploring a $250 billion funding backstop for OpenAI, raising worries about the intertwining of these companies. This has contributed to souring sentiment in the chip sector, as tech traders are increasingly anxious about Chinese competition narrowing the AI gap with US firms, potentially undermining future payoffs.56
Investors are particularly focused on SK Hynix's upcoming results, expected around 8 p.m. ET, which could provide crucial insights into the memory trade amidst swirling AI concerns. The market's reaction to these developments indicates a cautious optimism as tech stocks attempt to stabilize in a volatile environment.
“The Nasdaq hovered near the flat line as investors reacted to a sell-off in chip stocks, driven by fears of circular financing linked to Nvidia's potential $250 billion funding for OpenAI. Meanwhile, SK Hynix's upcoming results are anticipated for insights into the memory trade amid growing competition from Chinese firms.”
Yahoo Finance
