Dow ends lower as AI shares rebound and European indexes retreat

Bond yields climb after French protests as AI spending leans on borrowing

U.S. market breadth. In New York, AI-related stocks rebounded Monday, recovering some of their steep losses from the prior week while the rest of the U.S. market and stocks worldwide remained shaky, according to Associated Press reporting by Stan Choe. The S&P 500 rose 0.4% after its worst week since June, and the Nasdaq composite gained 1.1% because it is heavily weighted toward technology stocks.

The majority of U.S. stocks outside AI and technology declined. The Dow Jones Industrial Average swung between losses and gains before ending with a drop of 36 points, or 0.1%, AP reported.

AI-linked company moves. AI stocks had stood out for most of the past few years as spending for AI technology pushed the sector to the forefront of the market, sent its prices to records and helped drive indexes higher. Last week, AI shares tumbled as investors worried that more expensive borrowing could threaten the boom.

Much of the spending on AI chips and data centers has come from borrowed money, AP reported. Treasury yields in the bond market have recently reached their highest levels in years or even decades, raising the cost of borrowing for everyone.

Nvidia gained 1.4% and was one of the strongest forces lifting the S&P 500. Because Nvidia is the largest stock on Wall Street by total market value, a 1% move in its shares affects the index more than a 1% move in any other stock.

SpaceX, which controls the xAI business, rose 1.3% to $147.96. SpaceX founder Elon Musk pledged Monday to give one share of SpaceX to “every kid in America” next year. The pledge came after Anthropic said over the weekend that it would commit 5% of the shares in its initial public offering to a new “public benefit” fund.

CoreWeave remained at the center of the market’s swings. The company has borrowed money to buy AI chips that it rents to customers over the cloud. After initially jumping more than 7% in the morning, CoreWeave flipped to a loss of 3.5% before closing down 0.4%, following a 25.2% decline the previous week.

Scheduled reports and profit expectations. The swings came ahead of profit reports later in the week that could provide more detail about the strength of AI-related spending. Meta Platforms, which is pushing its Muse AI agent, was scheduled to release its latest quarterly results Wednesday. Lam Research, which supplies equipment and services for making semiconductors, was scheduled to discuss its business Wednesday.

Expectations were high across U.S. companies’ profits for the summer. According to FactSet, analysts forecast overall growth of 29% for companies in the S&P 500 from the prior summer. Those high expectations had allowed the U.S. stock market to run to records despite worries about war, high inflation and pressure from the bond market.

Cleveland-Cliffs rallied 16.3% after reporting a bigger profit for its latest quarter than analysts expected. CEO Lourenco Goncalves said it was the company’s strongest quarter in three years and that the outlook for profit in 2027 “has improved materially” from three months ago.

European protests and bond yields. European losses were sharper than Wall Street’s, with indexes sliding more than 1% following protests that could ultimately force the French government to increase spending to ease voters’ anger. The protests, which escalated over the weekend, opposed the rising cost of living and poor school conditions. The possibility of increased spending could put more pressure on bond markets, and government bond yields rose worldwide.

The protests could pressure governments to boost spending to offer help, which would likely add to their already large debt piles. AP reported that yields rose for French bonds much more than for German government bonds as the French government’s already strained budget drew concern. Investors had historically seen German government bonds as a safer bet.

In the U.S. bond market, the yield on the 10-year Treasury climbed to 5.14% from 5.09% late Friday. It topped 5.30% earlier in the month and touched its highest level since 2002. Federal Reserve Economic Data’s 10-Year Treasury Yield series separately listed a raw daily observation of 5.09% for Oct. 19, 2026.

Kospi, oil and index closes. Abroad, rebounds in AI stocks helped South Korea’s Kospi jump 1.8%, recovering some of its 14.5% decline from the prior week. The index is dominated by Samsung Electronics and SK Hynix, two major players in the AI industry. Their prominence in the index has made it much more volatile than other markets.

Oil prices remained shaky. The price for a barrel of Brent crude, the international standard, swung between $107 and $110 during the session before settling at $109.55, down 0.3%. Over the month, the price ranged from $97 to $110 amid uncertainty about when the war with Iran would allow the energy industry to return to normal.

All told, the S&P 500 rose 31.29 points to 7,690.73. The Dow Jones Industrial Average fell 36.38 points to 51,966.03, and the Nasdaq composite gained 290.85 points to 26,430.89. Stan Choe reported for the Associated Press, and AP Business Writer Chan Ho-him contributed to the report.