AI stocks recover some of last week’s sell-off, while oil prices come off their overnight highs

Wall Street reversed some of Friday’s losses Monday, with AI-related stocks leading gains after a volatile week. The S&P 500 climbed 0.7%, recovering from a 2.6% drop—the worst since October—while the Nasdaq surged 1.4%. Chipmakers and memory producers, key beneficiaries of the AI boom, drove much of the rebound; Micron Technology jumped 11.1% after a 13.3% Friday plunge, and Marvell Technology rose 15.1% on its inclusion in the S&P 500 index. The correction followed weeks of rapid gains, with semiconductor stocks up nearly 85% year-to-date, raising concerns about overvaluation. Marvell’s stock more than tripled in 2026, fueled by speculation it could become a trillion-dollar company, while Micron’s stock has tripled since January. Analysts like Morgan Stanley’s Michael Wilson suggest Friday’s drop was a healthy correction, though it remains unclear whether it signals a broader downturn. Oil prices fluctuated amid escalating tensions between Israel and Iran, which launched strikes over the weekend. Brent crude briefly hit $98 per barrel overnight but settled at $94.60, up 1.6% from Friday, after Iran announced it was halting offensive operations. The conflict has already contributed to higher inflation, as global fuel costs rise. Tech gains were mixed outside AI-linked stocks: Corning rose 6.2% after Amazon announced a multibillion-dollar deal for optical fiber production, while Campbell’s dipped 1.1% despite stronger-than-expected quarterly profits. The company’s stock will also exit the S&P 500 as Marvell joins the index. Investors now weigh whether the recent volatility signals a pause or a deeper adjustment in markets driven by AI speculation. Analysts remain cautiously optimistic, with Morgan Stanley predicting further S&P 500 growth toward an 8,000 target by year-end, though geopolitical risks and inflation pressures linger.