Stocks Steady as AI Rally Continues, Oil Pulls Back
U.S. equities held steady mid-morning, with the S&P 500 near record highs and the Nasdaq boosted by AI-related shares. Oil prices fell further after reports that Iran might reopen the Strait of Hormuz, while China's regulator is investigating DeepSeek and Moonshot AI over alleged data routing to Anthropic's Claude. Market breadth remained negative despite the advance.
The S&P 500’s prolonged sideways drift since June masks a narrow advance, with AI and semiconductor names powering the Nasdaq while most stocks lag. The QQQ’s sharp rebound from post-FOMC lows underscores how rate-sensitive tech has become. Oil’s slide follows diplomatic signals from Iran and Qatar, though Revolutionary Guard comments tempered the move. Separately, China’s regulator is probing DeepSeek and Moonshot AI over alleged data routing to Anthropic’s Claude, raising cross-border data security concerns. Economic data showed a weaker Richmond manufacturing index, while lab stocks fell on proposed Medicare price cuts.
This mixed tape—record-high tech alongside negative breadth and falling oil—could signal a market increasingly dependent on a handful of AI names, leaving broader indices vulnerable to concentration risk. Oil’s pullback may ease inflation pressures, but geopolitical uncertainty remains. Regulatory scrutiny of Chinese AI firms could reshape global data flows and tech partnerships, affecting investors and multinational corporations. Retail investors tracking index funds may see muted gains despite headline records, while energy and lab sectors face direct earnings pressure.