Volatile AI Trade Rises, but Oil Kept Wall Street on Edge Last Week

Wall Street's record-setting start to the week ran into two familiar sources of volatility: the artificial intelligence trade and oil. While the Dow Jones Industrial Average briefly surpassed 53,000 for the first time, renewed U.S.-Iran tensions erased those gains, leaving the index down 0.5% for the week.

Chip stocks, once a major market driver, experienced sharp swings as investors questioned if the AI trade had become overextended. Nevertheless, the tech-heavy Nasdaq gained 1.74% for the week, and the S&P 500 rose 1.23%. Both indexes have finished higher in four of the past five weeks.

Semiconductor stocks were a focal point, starting the week strong before facing setbacks. Samsung's results failed to impress, and reports of China's DeepSeek developing its own AI chip caused declines in stocks like Micron and the VanEck Semiconductor ETF.

A significant development was Apple's multiyear deal with Broadcom, exceeding $30 billion. This agreement involves over 15 billion U.S.-made chips and an expansion of Broadcom's manufacturing facility in Colorado, boosting Broadcom's stock by nearly 5%.

Meta Platforms also made headlines by preparing to launch a cloud business selling excess computing power. This move positions Meta to compete with major cloud providers like Amazon Web Services, Microsoft Azure, and Google Cloud, indicating a strategy to monetize its AI investments.