Wall Street's Move Away From AI Accelerates

Most of Wall Street rose Tuesday, even as stocks of computer chipmakers continued to tumble worldwide.

• The S&P 500 rose 15.60 points, or 0.2%, to 7,428.78, but the modest move masked big swings underneath the surface.
• The Dow Jones Industrial Average rose 537.24 points, or 1%, to 52,747.32.
• The Nasdaq composite fell 55.17 points, or 0.2%, to 24,876.91.

The majority of the US market rose after more companies delivered stronger profits for the spring than analysts expected, the AP reports. Coca-Cola climbed 5% after its revenue rose 7% despite what CEO Henrique Braun called "a dynamic consumer landscape."

Sherwin-Williams rallied 8.3%, and Illinois Tool Works rose 3.6% after both likewise reported stronger earnings for the latest quarter than analysts expected. Stock prices generally follow the trend of corporate profits over the long term, and expectations are high for this most recent round of reports with the US stock market still near its all-time high. Such expectations are weighing particularly heavily on stocks of chipmakers and other companies that have been huge winners from the boom in artificial-intelligence technology.

Micron Technology's stock came into the day having more than tripled for the year following gangbuster growth, for example. During the three months through May 28, its revenue more than quadrupled from a year earlier. But worries are rising about whether such growth is sustainable. Micron dropped 8.9% Tuesday and was the heaviest weight on the S&P 500. Others also helping to keep the market in check were Advanced Micro Devices, down 8.1%, and Applied Materials, down 7.8%.

• The losses for chip stocks were even worse earlier in the day in other markets worldwide. Sharp drops for SK Hynix and Samsung Electronics dragged South Korea's Kospi index down 10.8%. The market's losses were so big that trading was temporarily halted at times in Seoul.
• "We believe the market was likely spooked by the progress of China's chipmaking equipment capabilities, and was worried that this progress would threaten the competitive position of global chipmaking and chip equipment leaders," said equity analyst Jing Jie Yu of Morningstar. "That said, we believe the sell-off today is largely a knee-jerk reaction and overdone," he said. The dominant position of global chipmaking leaders is unlikely to be threatened meaningfully, he said.

In the oil market, the price for a barrel of Brent crude to be delivered in October fell 4.4% to settle at $82.08. It's been falling since late last week, when the price for a barrel to be delivered in September briefly shot as high as $102. The drop in oil prices helped push traders to trim their bets that the Federal Reserve could announce a hike to interest rates following its latest meeting on Wednesday. They're forecasting a 31.5% probability, down from more than 36% a day before, according to data from CME Group.