Technology stocks are continuing to fall on Wednesday, and the S&P 500 index is on track for its first back-to-back drop in three weeks. This was reported by Qazaqyia.kz citing Associated Press.
The main measure of Wall Street's health slipped 0.6%. The Dow Jones Industrial Average was down 314 points, or 0.6%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.8% lower.
More drops for stocks swept up in the artificial-intelligence boom dragged indexes lower. After roaring to records and pulling the market up with them, AI stocks took a sudden turn lower last week. Among the worries is that their prices have simply shot too high, too fast.
Super Micro Computer, which sells AI servers, tumbled 13.5% after saying it plans to raise $7 billion in cash by selling shares of stock and convertible preferred stock. Such moves raise the most money for companies when their stock prices are high, and they can dilute the ownership stakes of existing shareholders.
Micron Technology fell 2.8%, chipping more away from its tremendous gain for the year so far. A week ago, the computer memory maker's stock was up nearly 280%. Now, its year-to-date gain is down to 218.2%.
An update on U.S. inflation that arrived an hour before trading began helped pare the losses. The report said inflation accelerated to its highest level in three years, but that was exactly what economists had forecast. An important underlying measure of inflation, meanwhile, slowed by slightly more in May from April than economists expected.
That helped Treasury yields ease a bit in the bond market. The yield on the 10-year Treasury edged down to 4.52% from 4.53% just before the inflation report's release. The two-year Treasury yield eased to 4.11% from 4.13% just before the report.
Traders have been building bets recently that the Fed will have to hike its main interest rate at least once this year. Wednesday's inflation update caused them to trim their bets, but only by a smidgen.
Keeping things uncertain are continued swings for crude oil prices. The price for a barrel of Brent crude oil rose 1.1% to $92.43 after President Donald Trump warned Iran would "pay the price" for stalled negotiations.
In stock markets abroad, indexes in Europe pared their losses following the update on U.S. inflation. In Asia, the losses were sharper. South Korea's Kospi dropped 4.5%, hurt by losses for tech giants Samsung Electronics and SK Hynix. Tokyo's Nikkei 225 sank 1.9% after data showed Japan's producer price index rose in May at the fastest pace in more than three years. Shares of technology and telecommunications giant SoftBank Group, which has a strong AI focus, lost 8.3%.