US stocks rise amid choppy trading on world financial markets

U.S. stocks are rising on Monday in choppy trading on world financial markets, while AI stocks continue to swing and Brazilian stocks fall.

The S&P 500 rose 0.8%, recovering its losses since last week , and is 1.6% below its all -time high reached earlier this month . As of 1:15 p.m . Eastern time, the Dow Jones Industrial Average was up 154 points , or 0.3%, and the Nasdaq composite was 1.1% higher .

The biggest boost to the market came from Nvidia , whose shares rose 2.5%. This helped the chipmaker recover part of its decline after three straight weekly losses , its longest streak since June , and keep a larger market value than Apple on Wall Street.

But shares in other parts of the AI industry have not held steady . Concerns about how expensive it is for companies to borrow money to build data centers and buy more AI chips are raising questions about whether the industry’s boom is in danger .

Meta helps lead the swings

Meta Platforms rose and fell after announcing plans to raise $35 billion by selling shares to pay for its AI investments . It also said it could raise another $60 billion by selling a new class of shares after trading begins . Meta’s shares initially fell more than 2%, but quickly turned to a gain , then slipped back to a 0.2% loss .

Meta said Nvidia , Advanced Micro Devices and Broadcom have already indicated they intend to buy a combined $5 billion of shares in the offering . This signals strong interest from large chip companies seeking to benefit from additional AI investment . But it also gives ammunition to critics of “ circular financing ,” who say it would raise risks if AI proves less successful than expected .

Concerns about borrowing for AI remain

SpaceX , the rocket company that also runs Elon Musk’s AI business , has seen similar swings . Its shares started with a loss but gained 0.9% after the company struck a roughly $40 billion deal with an entity managed by Apollo Global Management to lease AI computing power .

Musk warned over the weekend that hundreds of companies that lease out AI computing power are at risk because they are struggling to borrow money . He wrote on the social media platform X that they could face “ guppy-level death and consolidation .”

CoreWeave , which borrows money to buy the AI computing power it leases to customers , has been at the center of investor worry in recent weeks . Shortly after trading began Monday , its shares fell 5.5%, but then gained 5.1%. Such minute-by-minute swings have become routine for it in recent days .

A big week for earnings reports

This week’s earnings reports from big tech companies could provide more information on how AI spending is going and whether it is delivering the profits and productivity that supporters have promised .

Alphabet and Microsoft will report their latest quarterly results on Wednesday , and Amazon on Thursday .

Companies in all sectors are under pressure to report strong profit growth . Despite high inflation , high interest rates and other worries , lofty growth expectations have recently pushed stock prices to record highs .

Verizon Communications reported higher profit than analysts expected , even though its revenue fell short of forecasts , but its shares fell 2.8%.

About one in three stocks in the S&P 500 is scheduled to report its latest quarterly results this week .

Brazilian stocks fall after mixed moves in other markets

In overseas stock markets , Brazilian stocks fell sharply after a result that surprised investors following President Luiz Inácio Lula da Silva’s re- election . Investor concern stems from the possibility that he could increase government spending and put more pressure on the country’s debt . Brazil’s Bovespa stock index fell 14.6%.

Other governments around the world are also feeling pressure from worries about high debt loads and strained budgets . France has recently been at the center of concern after violent protests in the country .

But French government bond yields fell on Monday , and the CAC 40 stock index rose 0.8%, one of the best performances in the world . Indexes also rose in other European markets after mixed results in Asia .

The European Central Bank and the Bank of Japan will meet later this week to vote on interest rates .

Interest rates fall ahead of the Federal Reserve meeting

In the U.S. bond market, yields on long-term Treasurys fell . The yield on the 10-year Treasury fell to 4.98% from 5.00% late Friday and from more than 5.30% earlier this month .

The two- year Treasury yield rose to 4.71% from 4.69% late Friday . It more closely tracks expectations for the Federal Reserve’s overnight interest rates , and among widely held expectations is that the Fed will say after its latest meeting on Wednesday that it will leave the federal funds rate alone .

The Fed raised its interest rate last month for the first time in three years , hoping to slow inflation . Inflation remains higher than desired .

Oil prices swing

In the morning , the price of a barrel of Brent crude fell to $109, but later erased its losses and returned to $111.40. This is near the top of its price range since the war with Iran began . Since then , the highest price for the most actively traded Brent crude was about $120, reached in March .