Wall Street points toward gains after another AI sell-off, oil prices slip

U.S. stock futures pointed to gains Thursday as Wall Street recovered from another volatile session, with AI-related stocks driving fluctuations. Futures for the S&P 500 rose 0.8% and the Dow Jones Industrial Average climbed 0.7%, while Nasdaq futures slipped 0.1%. AI-linked chipmakers like Micron Technology rebounded, rising 3% after a 4.7% loss the prior day, though the sector remains volatile following recent sharp declines. Investors are questioning whether the sell-off reflects a correction of overinflated valuations or the start of a broader downturn, especially ahead of high-profile IPOs like SpaceX’s potential debut. Oil prices retreated after rising earlier, as U.S. airstrikes against Iran continued to disrupt shipping through the Strait of Hormuz, blocking crude deliveries from the Persian Gulf. Brent crude fell 90 cents to $92.20 per barrel, down from around $70 before the war began in late February. The conflict has tightened global oil supplies, contributing to inflation pressures that reached their highest pace in three years in May. Market sentiment is further influenced by expectations that the Federal Reserve may raise interest rates at least once this year, given persistent inflation and a strong U.S. job market. Higher yields could slow economic growth and reduce demand for riskier assets like stocks and cryptocurrencies, with some analysts warning AI valuations may have become unsustainable. European markets showed modest gains, with Germany’s DAX up 0.2%, France’s CAC 40 rising 0.8%, and the UK’s FTSE 100 adding 0.9%. In Asia, Japan’s Nikkei 225 edged up slightly, while South Korea’s Kospi gained 0.4%. Hong Kong’s Hang Seng and Shanghai Composite both declined, as did Australia’s S&P/ASX 200, reflecting mixed regional sentiment amid global economic uncertainties.