AI Stocks Slump, Oil Prices Rise       05/12 15:23

   A sudden halt for technology stocks put the brakes on Wall Street's 
record-setting run. 

   (AP) -- A sudden halt for technology stocks put the brakes on Wall Street's 
record-setting run. The S&P 500 dipped 0.2% Tuesday from its all-time high set 
the day before. The Dow Jones Industrial Average added 0.1%, and the Nasdaq 
composite sank 0.7% from its own record. Stocks that had roared higher in the 
artificial-intelligence boom were some of the market's heaviest weights. The 
pullback began in Asia, where South Korea's Kospi index tumbled 2.3% on worries 
that the government may redistribute windfall AI profits to its citizens. Oil 
prices meanwhile rose more than 3% as the war with Iran threatens to drag on.

   THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.

   Rising oil prices and a sudden halt for technology stocks are knocking Wall 
Street off its record highs on Tuesday.

   The S&P 500 fell 0.4% from its all-time high set the day before. The Dow 
Jones Industrial Average was up 73 points, or 0.2%, as of 2:26 p.m. Eastern 
time, and the Nasdaq composite was down 1.2% from its own record.

   Some of the sharpest drops hit chip companies and stocks that had been on 
electric runs because of the artificial-intelligence boom. Intel slumped 8.6% 
after its stock had more than tripled so far this year. Micron Technology 
dropped 6.1% after coming into the day with a gain of nearly 180% for the year 
to date, and CoreWeave sank 7.7% to cut into its gain of 60% for 2026.

   The pullback for AI stocks began earlier in the day in Asia, where South 
Korea's Kospi index sank 2.3% from its all-time high on worries that the 
government may redistribute windfall AI profits from companies to its citizens.

   Also weighing on Wall Street was another rise in oil prices as the war with 
Iran threatens to drag on. The price for a barrel of Brent crude climbed 3.6% 
to $107.97 as a fragile U.S.-Iran ceasefire looks more tenuous. The war has 
essentially shut the Strait of Hormuz to oil tankers, keeping them stuck in the 
Persian Gulf instead of delivering crude to customers worldwide.

   The resulting leap for crude oil prices, with Brent up from roughly $70 per 
barrel before the war, caused inflation in the United States to worsen last 
month by more than economists expected, according to a report released Tuesday. 
In another discouraging signal, price increases accelerated by more in April 
than economists expected even after excluding gasoline and food costs.

   That could be a result of tariffs and bad weather also pushing prices 
higher, according to Brian Jacobsen, chief economic strategist at Annex Wealth 
Management.

   Treasury yields rose in the bond market following an initial zigzag, 
suggesting traders suspect the Federal Reserve will keep interest rates high to 
combat inflation.

   The Fed has been keeping its cuts to interest rates on hold recently, as it 
waits to see how high inflation will go because of the war with Iran and the 
tariffs introduced by President Donald Trump. That's because lower rates can 
worsen inflation at the same time that they give the economy a boost.

   The yield on the 10-year Treasury rose to 4.46% from 4.42% late Monday and 
remains well above its 3.97% level from before the war.

   Traders still largely expect the Fed to keep its main interest rate steady 
this year, but they're now betting on a better than 1-in-3 chance that it could 
hike rates by December, according to data from CME Group. Higher rates tend to 
push down on stock prices, while also slowing the economy.

   Despite the climbs for Treasury yields, oil prices and uncertainty because 
of the Iran war, the U.S. stock market has remained remarkably resilient 
recently, in large part because companies keep producing bigger profits than 
analysts expected.

   Zebra Technologies became the latest company in the S&P 500 to top analysts' 
expectations for earnings, and its stock leaped 14.4%. The company, which helps 
customers digitize and automate their workflows with bar code scanners and 
other products, also gave a forecast for profit over the full year that topped 
analysts' expectations.

   But Under Armour sank 19.4% after reporting a worse loss for the latest 
quarter than analysts expected. CEO Kevin Plank said the company is continuing 
steps to "reset the business and restore the discipline required to operate as 
a best-in-class brand."

   Outside of earnings reports, GameStop fell 2.5% after eBay rejected a buyout 
offer from the much smaller company, calling it "neither credible nor 
attractive." It highlighted uncertainty about how GameStop would raise the 
money to pull off the purchases, among other challenges for the deal, and 
eBay's stock added 1.4%.

   Beazer Homes USA fell 4.8% after likewise rejecting an unsolicited buyout 
offer. It said that Dream Finders Homes has repeatedly undervalued it in its 
attempts to buy the homebuilder, including with its latest bid, which offered 
less than prior offers.

   Dream Finders dropped 13.7%.

   In stock markets abroad, indexes mostly fell across Europe and Asia.

   Besides South Korea's tumble, losses of 1.6% for Germany's DAX and 1% for 
France's CAC 40 were some of the world's sharpest.

   Japan's Nikkei 225 added 0.5%.