* Blowout earnings help lift mood on AI
* Yen near 40-year lows as intervention risks loom
* Oil prices at pre-war levels as tankers pass through
Hormuz
(New throughout, updates with U.S. markets and adds analyst
comment)
By Chibuike Oguh
NEW YORK, June 25 (Reuters) - Global stocks rose on Thursday
as strong earnings from chipmakers lifted sentiment, while the
dollar hovered near a one-year high, with investors remaining
wary about stretched valuations.
The benchmark S&P 500 and the Nasdaq were advancing on Wall
Street, led by industrials, healthcare and materials stocks.
Micron was up 10% after the memory chipmaker's solid
forecast helped extend its AI-driven ascent.
Qualcomm ( QCOM ) rose 4% after reporting that it expects $15
billion a year in sales from its data center business by 2029.
The Nasdaq was down, however, pulled lower by choppy trading
among most megacap technology stocks. Apple ( AAPL ) was down
5.3%.
The Dow Jones Industrial Average rose 1%, the S&P 500
rose 0.21%, and the Nasdaq Composite fell 0.46%.
AI VALUATIONS AND INTEREST RATES DRIVE SENTIMENT
Investor concern that valuations of AI-related companies
have become stretched after years of gains has weighed on
markets in recent days, leading to volatile sessions.
Furthermore, markets are pricing in higher interest rates from
the U.S. Federal Reserve and other central banks.
"If you took the tech sector alone against the S&P 500
excluding technology going back to 2000, we are about 2.8
standard deviations away from the average," said Marc Dizard,
chief investment officer at Huntington Bank.
"When you get the magnitude of that move, it's not
surprising to us that we would get a little bit of a pause, some
consolidation and rebalancing where investors are taking profits
off the table."
In Europe, the broad STOXX 600 rose 0.92%. MSCI's
gauge of stocks across the globe rose 0.42%.
"Technology is a long-duration asset as the story plays out,
not necessarily in the next six months. And when you have the
Fed come out with a more hawkish tone, long-duration assets are
going to sell off in that time period," Dizard said.
U.S. inflation data on Thursday broke 4% annually for the first
time in three years as the Middle East conflict boosted energy
prices, but the monthly reading was slightly below expectations,
helping to push yields lower.
The yield on benchmark U.S. 10-year notes
fell 1.37 basis points to 4.386%. The 2-year note
yield fell 2.64 basis points to 4.111%.
OIL BACK TO PRE-WAR LEVELS
Oil prices edged higher but were still near levels last seen
before the start of the U.S.-Israeli war on Iran, as
expectations of rising supply from the Middle East outweighed
demand concerns.
Brent crude futures were up 1% to $74.49 a barrel.
In currencies, the dollar fell against major peers but was
still near its highest level in a year.
The euro was last at $1.1388, a whisker above Wednesday's
13-month low, while the Japanese yen was near its lowest
in 40 years against the dollar, with more intervention widely
expected from Tokyo after the last bout around May failed to
stem the currency's decline.
The yen strengthened 0.1% against the greenback
to 161.63 per dollar.
The dollar index, which measures the greenback against a
basket of currencies including the yen and the euro,
fell 0.29% to 101.30.
Gold rose as the U.S. dollar fell. Spot gold
rose 0.68% to $4,027.67 an ounce.