Wall Street Rebounds as AI Stocks Recover While Middle East Tensions Keep Oil Prices Elevated

BY EMMANUEL OGBONNA

Wall Street regained some stability on Monday after a sharp sell-off at the end of last week, with technology and artificial intelligence-related stocks leading a recovery that helped major indexes finish higher.

Investors, however, remained cautious as rising tensions in the Middle East continued to support elevated oil prices and raised concerns about inflation and global economic growth.

The benchmark S&P 500 posted a modest gain after suffering its steepest one-day decline in months on Friday. The index climbed 21.99 points, or 0.3%, to close at 7,405.73. The technology-heavy Nasdaq Composite advanced 220.23 points, or 0.9%, ending the session at 25,929.66 as investors returned to AI-linked stocks that had been heavily sold in recent trading. The Dow Jones Industrial Average was less resilient, slipping 80.77 points, or 0.2%, to finish at 50,786.01.

The market’s recovery was driven largely by a rebound among semiconductor and memory-chip manufacturers that have been among the biggest beneficiaries of the artificial intelligence boom. These companies experienced significant losses on Friday amid growing concerns that valuations had become stretched following months of rapid gains fueled by investor enthusiasm for AI technologies.

The sell-off had sparked anxiety across global markets, particularly in Asia, where technology-heavy indexes suffered severe losses. South Korea’s Kospi index plunged 8.3% earlier Monday as investors rushed to reduce exposure to major technology firms such as Samsung Electronics and SK Hynix. The decline reflected fears that the explosive rally in AI-related stocks may have pushed valuations beyond what current earnings can justify.

As trading moved from Asia into Europe and eventually New York, sentiment improved and buyers returned to the sector. One of the strongest performers was Micron Technology, which surged 9.9% after suffering a 13.3% decline on Friday, the worst performance among companies in the S&P 500 that day. Despite recent volatility, Micron shares have more than tripled since the beginning of 2026, reflecting strong investor confidence in demand for memory chips used in artificial intelligence systems and data centers.

Marvell Technology also enjoyed a strong session, rising 9.6% after S&P Dow Jones Indices announced that the semiconductor company would be added to the prestigious S&P 500 index. Inclusion in the index often attracts investment from funds that track the benchmark, creating additional demand for shares.

Marvell has emerged as one of the market’s biggest winners this year, with its stock price more than tripling. Investor enthusiasm intensified last week when shares surged more than 32% in a single day following comments made by Nvidia Chief Executive Officer during a technology conference in Taiwan. Huang suggested that Marvell could eventually become “the next trillion-dollar company,” a remark that immediately added billions of dollars to the company’s market value.

The speed and scale of such gains have fueled debate among analysts and investors over whether the AI-driven rally has become excessive. Critics argue that comments from influential industry leaders should not instantly generate enormous increases in company valuations. Supporters counter that demand for advanced chips, memory products and AI infrastructure continues to grow at a remarkable pace, supporting expectations for strong earnings growth.

A widely followed semiconductor index had gained nearly 85% this year before Friday’s sell-off, highlighting the extraordinary momentum behind the sector. Market participants are now debating whether last week’s decline represented the beginning of a broader correction or merely a temporary pause in an ongoing bull market.

Among those maintaining a positive outlook is Michael Wilson, chief U.S. equity strategist at . Wilson argued that a correction was both expected and necessary after the rapid gains seen since the market’s March lows. According to his assessment, temporary pullbacks can help remove excessive speculation and create a healthier foundation for future advances. He continues to project the S&P 500 could reach 8,000 by the end of the year, implying further upside from current levels.

Outside the technology sector, several companies also attracted investor attention. Corning rose 5.6% after announcing a multibillion-dollar agreement with . Under the deal, Corning will supply optical fiber, cable and related networking products for Amazon’s expanding network of data centers across the United States. The agreement highlights the massive infrastructure investments being made to support growing cloud-computing and artificial intelligence workloads.

Meanwhile, Campbell’s shares slipped 0.9% despite reporting quarterly profits that exceeded analysts’ expectations. Investors focused instead on weaker-than-expected revenue performance and the company’s upcoming removal from the S&P 500 index to make room for Marvell Technology.

Energy markets remained a major focus throughout the trading session. Oil prices surged overnight after Israel and Iran exchanged military strikes, reigniting fears that the conflict could escalate into a broader regional confrontation. The possibility of disruptions to energy supplies in one of the world’s most strategically important oil-producing regions triggered an immediate reaction from traders.

Brent crude, the global benchmark for oil prices, briefly climbed above $98 per barrel during overnight trading, approaching the psychologically significant $100 level. However, prices later retreated after indications emerged that both Israel and Iran were stepping back from further immediate military action. Brent ultimately settled at $94.25 per barrel, still representing a gain of 1.2% from Friday’s close.

The rise in oil prices has added to concerns about inflation, which remains a key issue for policymakers and investors. Higher energy costs can filter through the economy by increasing transportation, manufacturing and household expenses. Persistent inflation could also influence central bank policy and keep borrowing costs elevated for longer than expected.

Bond markets reflected some of those concerns. U.S. Treasury yields edged higher following Friday’s sharp increase. The yield on the benchmark 10-year Treasury note rose slightly to 4.56% from 4.55%. Higher bond yields can make stocks less attractive by increasing the returns available from lower-risk investments and raising financing costs for businesses.

International markets remained under pressure despite the rebound on Wall Street. European stock indexes finished modestly lower, while losses in Asia were more severe. Japan’s Nikkei 225 dropped 3.8%, extending a recent period of volatility for technology shares. Chinese markets also weakened, with stocks falling 1.7% in Shanghai and 1.2% in Hong Kong.

The contrasting movements across global markets underscored the uncertainty facing investors. While enthusiasm surrounding artificial intelligence continues to drive significant gains in technology stocks, geopolitical risks, elevated oil prices and concerns about inflation remain important challenges that could influence market direction in the months ahead.

For now, Monday’s trading session suggested that many investors remain willing to buy into the AI story despite periodic bouts of volatility, viewing recent declines as an opportunity rather than a signal that the rally has run its course.