NEW YORK, Feb 17 : Wall Street stocks see-sawed on Tuesday, as investors continued to wrestle with the pros and cons of the artificial intelligence boom, while gold slid and crude dipped as nuclear talks progressed between the United States and Iran.
The three main U.S. stock indexes gyrated throughout the session with the recent tech selloff prompting some bargain hunting, while the dollar gained strength and gold slipped to a one-week low.
Worries that companies are over-investing in AI and the extent to which the nascent technology could disrupt labor markets have been contributing to investor jitters in recent weeks.
“The conversation about AI rose to the top of market concerns about two weeks ago, regarding the negative effect on employment in a broad variety of industries, and it’s continuing,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “There’s a lot of validity in that AI will result in less demand for certain types of workers. It clearly has affected the tone of the market over the last couple of weeks.”
Federal Reserve Governor Michael Barr said that “there might be serious short-term disruptions in the labor market” attributable to AI, even if the long-term gains to society could be quite favorable.
Turning to the subject of monetary policy, Barr said that the next interest rate cut might not occur “for some time” amid risks to the United States’ inflation outlook.
The United States and Iran have reached an understanding regarding the “guiding principles” in continuing negotiations over their nuclear dispute, while stressing that a deal is not necessarily imminent, according to Abbas Araqchi, Iran’s foreign minister.
“It’s an optimistic starting point,” Tuz added. “It’s way too early to tell, but the fact that they’re talking and haven’t gotten more aggressive is positive.”
The Dow Jones Industrial Average rose 140.64 points, or 0.28 per cent, to 49,641.57, the S&P 500 rose 30.11 points, or 0.44 per cent, to 6,866.13 and the Nasdaq Composite rose 140.80 points, or 0.62 per cent, to 22,687.47.
European stocks rallied, boosted by financials and healthcare stocks, while investors kept an eye on geopolitical developments and continued to assess the extent to which AI could reshape business models.
MSCI’s gauge of stocks across the globe rose 3.04 points, or 0.29 per cent, to 1,045.68.
The pan-European STOXX 600 index rose 0.45 per cent, while Europe’s broad FTSEurofirst 300 index rose 12.58 points, or 0.51 per cent.
Emerging market stocks rose 0.05 points, or 0.00 per cent, to 1,557.91. MSCI’s broadest index of Asia-Pacific shares outside Japan closed higher by 0.21 per cent, to 797.45, while Japan’s Nikkei fell 239.92 points, or 0.42 per cent, to 56,566.49.
The dollar held gains as markets looked ahead to the release of the minutes from the U.S. Federal Reserve’s most recent monetary policy meeting, while also benefiting from risk-off sentiment due to simmering geopolitical uncertainties.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.1 per cent to 97.19, with the euro down 0.05 per cent at $1.1844.
Against the Japanese yen, the dollar weakened 0.08 per cent to 153.39.
In cryptocurrencies, bitcoin fell 1.45 per cent to $67,852.18. Ethereum rose 0.05 per cent to $1,999.84.
U.S. Treasury yields were mixed in the wake of weaker British economic data and as traders continued to monitor the likely path of Federal Reserve policy.
The yield on benchmark U.S. 10-year notes rose 0.2 basis points to 4.058 per cent, from 4.056 per cent late on Friday.
The 30-year bond yield fell 1.4 basis points to 4.6846 per cent from 4.699 per cent late on Friday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 3.3 basis points to 3.443 per cent, from 3.41 per cent late on Friday.
Crude oil prices touched a two-week low on easing supply following signs of progress between the U.S. and Iran.
U.S. crude fell 0.89 per cent to settle at $62.33 per barrel, while Brent settled at $67.42 per barrel, down 1.79 per cent on the day.
Gold prices touched a one-week low on cooling safe-haven demand, moving in opposition to the strengthening greenback.
Spot gold fell 2.14 per cent to $4,885.48 an ounce. U.S. gold futures fell 3.16 per cent to $4,863.20 an ounce.
