Wall Street climbs, oil slides as investors bet on AI growth over Middle East tensions

By Pete Schroeder

WASHINGTON, July 10 (Reuters) - Stocks climbed and oil prices slipped somewhat as investors retained AI-related enthusiasm and shrugged off the ongoing dispute between the U.S. and Iran.

All three major U.S. indices ended the day higher Friday, with the Dow Jones Industrial Average rising 0.29%, the S&P 500 climbing 0.42%, and the Nasdaq Composite gaining 0.29%.

MSCI's gauge of stocks across the globe was last up 0.4%.

While the renewed back-and-forth attacks have further eroded the fragile three-week-old U.S.-Iran ceasefire, markets have mostly taken developments in the Middle East in their stride, although investors continue to eye oil prices and the potential for ensuing inflation.

SK HYNIX'S U.S. DEBUT

South Korean chipmaker SK Hynix hit U.S. markets Friday with a boom, as its U.S.-listed shares jumped 14% in their Nasdaq debut, after the firm raised about $26.5 billion, indicating strong investor appetite to gain exposure to the AI supply chain.

The blockbuster offering, which will finance new factories and equipment to meet surging AI chip demand, is set to be the world's second-biggest share sale after SpaceX's record-breaking IPO last month. 

Oil prices took a step back Friday, as investors awaited clarity on the fraying ceasefire between the U.S. and Iran. U.S. President Donald Trump said Friday that the two nations will continue to negotiate, but the June agreement to halt military action was "over." Both nations claimed military actions in recent days in the Gulf, reigniting a conflict that upended global energy trade by disrupting navigation through the Strait of Hormuz.

Despite looming concerns, U.S. crude prices fell 0.74% to $71.55 a barrel, while Brent fell to $75.99per barrel, down 0.41% on the day.

"Oil prices have also remained remarkably calm despite the conflict spilling over (once again) into some neighbouring countries," said BMO Senior Economist Carl Campus in a note. "While there are several factors that could be helping prevent a bigger surge ... perhaps it’s simply a reflection of the underlying optimism regarding ongoing talks."

In currency markets, attention remained on the Japanese yen, which firmed sharply after Japanese Finance Minister Satsuki Katayama's comments suggesting repatriation could be in store for Japanese investors. 

It was last 0.4% stronger at 161.71 per U.S. dollar. The frail yen has been hanging around its lowest level in 40 years in recent days as traders kept a watch for official intervention from Tokyo. [FRX/] 

The dollar otherwise was mostly muted as investors awaited catalysts to gauge the path of U.S. interest rates. The dollar index, which measures the greenback against a basket of currencies, including the yen and the euro,  rose 0.05% to 100.96.

The yield on benchmark U.S. 10-year notes rose 2.22 basis points to 4.561%.

(Reporting by Pete Schroeder in Washington; additional reporting by Neil Mackenzie in London and Ankur Banerjee in Singapore; Editing by Tom Hogue, Jan Harvey, Susan Fenton, Nick Zieminski, Aurora Ellis and Deepa Babington)