Wall Street is clawing back some of its steep losses from Friday, as stocks swept up in the artificial-intelligence boom bounce back on Monday. Oil prices, meanwhile, are higher following fighting between Israel and Iran, but they have come off their peaks from overnight.
The U.S. stock market had its worst day since October on Friday as a sell-off in big technology companies weighed down the broader market and a strong jobs report boosted expectations that the Federal Reserve will be forced to hike interest rates at some point this year.
On Bay Street, the TSX also started in the green by 0.7 per cent Monday after plummeting 2.3 per cent on Friday.
The S&P 500 rose 0.7 per cent following its 2.6 per cent drop from Friday, which was its worst since October. The Dow Jones Industrial Average was up 207 points, or 0.3 per cent, as of 10:25 a.m. Eastern time, and the Nasdaq composite was 1.1 per cent higher.
The S&P 500’s drop on Friday was its biggest one-day decline since October 10, when the Trump administration threatened to impose a 100 per cent tariff on imported goods from China. The losses helped push the benchmark index to its first losing week in the last 10.
Some of the best performers were companies that sell computer chips, memory and other products fueling the AI boom. They had plunged Friday amid worries that their prices had simply shot too high due to AI euphoria. Such worries dragged South Korea’s Kospi index down 8.3 per cent at the start of Monday, pummeling tech stocks there like Samsung Electronics and SK Hynix.
But prices recovered as trading moved westward through Europe to New York. Micron Technology rose 8.3 per cent after sliding 13.3 per cent Friday for the largest loss in the S&P 500. That resumed a run where its stock has more than tripled so far in 2026.
Marvell Technology climbed 8.8 per cent in its first trading after S&P Dow Jones Indices said the semiconductor company’s stock has grown enough to join its widely followed S&P 500 index. Marvell’s stock has also more than tripled so far this year, aided by a 32.5 per cent surge in one day last week. That was its best day since it began trading in 2000, and it came after Nvidia’s CEO, Jensen Huang, suggested at a conference in Taiwan that Marvell could be “the next trillion-dollar company.”
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That such a comment could add billions of dollars to a company’s value in an instant suggests to critics that AI stocks are running too hot. Chip and memory companies are indeed reaping big growth because of the AI boom, but their stock prices have been soaring at astounding speeds. A widely followed index of semiconductor stocks surged nearly 85 per cent for the year so far through Thursday, for example.
On Monday, U.S. Treasury yields eased a bit to take some pressure off the stock market.
The yield on the 10-year Treasury fell to 4.51 per cent from 4.55 per cent late Friday after a report showed the U.S. added a surprising 172,000 jobs in May, according to the Labor Department. It is the latest report showing that employment remains solid, despite the squeeze inflation is putting on businesses and consumers.
The latest reading on employment comes two weeks before Kevin Warsh heads his first policy meeting as chair of the Fed. Policymakers are widely expected to keep rates steady at the June 16-17 meeting despite pressure from President Donald Trump to lower borrowing costs. Longer-term, the market sees a better than 60 per cent chance the Fed will push rates higher by the end of the year, according to CME FedWatch, and little to no chance of a cut.
“Any hopes of a Fed rate cut have effectively been eliminated with this morning’s strong jobs report,” said Ronald Temple, chief market strategist at Lazard, in a research note.
The yield on the 10-year Treasury rose to 4.54 per cent from 4.50 per cent just before the report was released. The yield on the 2-year Treasury, which more closely tracks the Fed’s actions, jumped to 4.16 per cent from 4.04 per cent just prior to the report.
The Fed has been holding interest rates steady as it tries to gauge the ongoing impact from rising inflation. Prices were already ticking higher from the impact of tariffs. The U.S. war with Iran has essentially blocked crude oil shipments from moving through the Strait of Hormuz.
In the oil market, prices climbed after Israel and Iran launched strikes against each other, threatening to drag the region back into full-scale war. The price for a barrel of Brent crude oil, the international standard, briefly topped US$98 overnight, but it later eased back to $94.25, up 1.2 per cent, after the Iranian military said that it was halting offensive operations.
U.S. oil, or West Texas Intermediate, gained one per cent to $91.45 a barrel.
High oil prices caused by the war with Iran have already sent inflation higher, which increases not only bills for households but also yields in the bond market. High yields worldwide recently have threatened to slow economies and undercut prices for stocks and all kinds of other investments.
– With a file from Global’s Ariel Rabinovitch
© 2026 The Canadian Press