Global equities steadied Monday as AI stocks rebounded from Friday's rout, though Israel-Iran tensions kept oil above $94.
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S&P 500 recovers 0.3% as AI stocks bounce back from sell-off
The S&P 500 rose 0.3% to 7,405.73 after Friday's 2.6% plunge — its worst session since October — as AI-linked stocks recovered from a sell-off driven by valuation concerns.
"A correction was inevitable and ultimately healthy if this bull market is going to extend into year-end," said Michael Wilson, chief equity strategist at Morgan Stanley, who maintained his S&P 500 baseline target of 8,000.
The Nasdaq Composite climbed 0.9% to 25,929.66, while the Dow Jones Industrial Average slipped 80 points to 50,786.01. Micron Technology surged 9.9% after sliding 13.3% on Friday — the S&P 500's biggest loss that session — resuming a rally that has more than tripled the stock in 2026. Marvell Technology jumped 9.6% in its first trading after S&P Dow Jones Indices said the semiconductor company would join the S&P 500 index. Corning added 5.6% after Amazon announced a multibillion-dollar deal for optical fiber products.
The recovery leaves the S&P 500 up roughly 11% year to date, powered by a 63% surge in hyperscaler capital spending to $670 billion. But the question hanging over markets is whether Friday's drop was a one-day shakeout or the start of a deeper rotation out of AI winners into lagging sectors.
Oil and the rates backdrop
Brent crude rose 1.2% to settle at $94.25 a barrel after Israel launched airstrikes on central and western Iran early Monday. Prices briefly topped $98 overnight before paring gains after Iran's military announced it would cease offensive operations against Israel. The conflict, which began Feb. 28, has kept energy prices elevated and pushed inflation above the Fed's 2% target, complicating the outlook for interest rates.
The yield on the 10-year Treasury edged up to 4.56% from 4.55%, adding to Friday's jump after a stronger-than-expected jobs report boosted expectations that the Federal Reserve could raise rates this year.
Asia sell-off deepens
The sell-off's global reach was most acute in Asia, where South Korea's Kospi tumbled 8.3% as Samsung Electronics dropped 10.2% and SK Hynix fell 7.7%. Japan's Nikkei 225 lost 3.8%, while the Shanghai Composite shed 1.7% and Hong Kong's Hang Seng declined 1.2%.
What to watch
Traders are now focused on whether AI capital expenditure by hyperscalers — expected to rise 63% to $670 billion this year — can sustain the rally in semiconductor and memory stocks. SanDisk, Western Digital and Micron have been the biggest beneficiaries, with NAND flash memory prices rising as much as 234% in 2026, according to Gartner.
This article is for informational purposes only and does not constitute investment advice.
[1] Stocks are recovering from a sell-off — but even bullish investors warn of a bumpy ride ahead[2] The Stock Market's Biggest Winners And Losers Of 2026 So Far - Forbes[3] US stocks claw back some of the ground they lost on Friday - The Sun Chronicle[4] Wall Street, TSX rise after interest rate worries fuelled a sell-off Friday[5] Wall Street holds steadier as AI stocks recover some of their sell-off
