AI is keeping the market afloat
Wall Street spent Tuesday caught between two very different trades.
The Nasdaq pushed higher and touched another intraday record as enthusiasm around artificial intelligence continued to support technology stocks. The S&P 500 was roughly flat, while the Dow fell as weakness outside tech kept the broader rally contained.
Meta (NASDAQ: META) remains at the center of the latest AI surge. Shares jumped more than 11% Monday after its new Muse AI agent gained rapid traction, helping restart a technology rally that has now spread across semiconductors and other AI-linked names. Meta added further gains Tuesday.
Muse is particularly interesting because it gives the market something the AI trade constantly needs: evidence that consumers actually want the products being built with all that expensive computing infrastructure. The app can perform tasks such as sending emails, booking travel and completing actions across services, putting Meta deeper into the emerging AI-agent market.
A few of Tuesday’s larger individual moves included:
- PayPal (NASDAQ: PYPL): up more than 2% after announcing a shopping integration with Meta’s Muse
- Viking Therapeutics (NASDAQ: VKTX): up more than 25% following encouraging obesity-drug data
- SanDisk (NASDAQ: SNDK): up roughly 5% after a bullish analyst initiation tied partly to AI-driven memory demand
AI is still creating some of the market’s biggest moves. See what our analysts are following next →
Oil is keeping the rest of Wall Street cautious
The other side of Tuesday’s market sits in the energy complex.
Brent crude had fallen below $100 earlier as traders grew more optimistic that diplomacy could eventually restore more normal flows through the Strait of Hormuz. Saudi Arabia has also restarted its East-West Pipeline, while recent tanker data show improving exports from the region.
Oil recovered much of that decline after the U.S. President told the United Nations that a deal with Iran may not come until after the November midterm elections. Brent moved back toward $100 per barrel, removing some of the optimism that a near-term resolution was close.
The longer oil remains near triple digits, the harder it becomes for the rest of the market to fully join the technology rally. Diesel and other refined products remain expensive, inflation has already pushed the Federal Reserve back toward higher rates, and another energy spike would add pressure to both consumers and bond yields.
The market is trading two very different stories
Technology is behaving as though the AI growth cycle still has plenty of room left. Meta’s Muse launch has reinforced that view and helped keep the Nasdaq around record territory.
The broader economy is dealing with a less comfortable backdrop of high energy prices, elevated interest rates and an unresolved Middle East conflict.
That split is worth watching. If oil begins falling sustainably while AI demand remains strong, one of the biggest restraints on the broader equity market starts to disappear. If crude moves back toward recent highs, the inflation and rate story can quickly overpower another good week for technology.
For now, AI is doing enough to keep the indexes near their highs.
Oil is making sure the rally does not feel easy.
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