US stocks drift near their records as oil prices rise

NEW YORK (AP) — The U.S. stock market is drifting near its all-time high on Monday, while oil prices rise on uncertainty about when the Strait of Hormuz could reopen and get the global flow of crude going again.

The S&P 500 slipped 0.1%, coming off its record set on Friday. The Dow Jones Industrial Average was down 85 points, or 0.2%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.2% lower.

Momentum is slowing for stocks following a rally bolstered by reports showing profits soared during the spring for big U.S. companies. Earnings per share for companies in the S&P 500 are on track to be 50% higher from a year earlier, according to FactSet. That would be the best growth since five years ago, when the economy was roaring out of the chasm created by COVID.

Berkshire Hathaway is one of the latest companies to deliver a stronger profit for the last quarter than analysts expected, and the company built by legendary investor Warren Buffett said over the weekend that it’s also invested some of its massive pile of cash into stocks under its new CEO, Greg Abel.

Berkshire has been famous for buying stocks at what it considers low prices, and criticism has been high that U.S. stocks generally look too expensive. But when they report strong profits, it helps them look less pricey.

Berkshire Hathaway’s stock rose 2.1%.

Intel weighed on the market and fell 4% after saying it may sell $15 billion of its stock. Such a move would dilute the ownership stakes of existing investors, and Intel said it would likely use the cash for investments to take advantage of the huge spending underway on artificial-intelligence technology.

On the winning side of Wall Street were companies boosted by buyouts.

MarineMax jumped 45.6% after the retailer, marina operator and superyacht services provider said it agreed to sell itself for about $1.5 billion in cash to a portfolio company of Blackstone.

Varex Imaging leaped 48.2% after Teledyne Technologies said it would buy the maker of X-ray imaging components for $18.90 per share in cash.

In the oil market, the price for a barrel of Brent crude rose 2% to $85.23. It had swung between $72 and $102 last month as hopes rose and fell that the United States and Iran could reach an agreement that would allow oil tankers to freely exit the Middle East again to deliver crude worldwide.

But hopes are turning toward caution again, and the price of Brent is back to where it was earlier this month, as well as in mid-July, mid-June and in the first week of the war in March.

Higher oil prices push inflation upward, and the main event for Wall Street this week will likely be Wednesday’s update on how bad inflation was last month. Economists expect it to show inflation slowed to 3.4% from 3.5% in June.

A slowdown would mean less pressure on the Federal Reserve to raise interest rates. Higher rates would help keep a lid on inflation, but they would also slow the economy by making it more expensive for U.S. households and companies to borrow. They would also undercut prices for stocks and other investments.

A report on Friday showing unexpectedly weak hiring across the United States lowered Wall Street’s expectations for an upcoming cut to interest rates. But traders still see a 46% chance the Fed will raise its main interest rate at its next meeting in September, according to data from CME Group.

The yield on the 10-yer Treasury rose to 4.67% from 4.65% late Friday.

In stock markets abroad, indexes were mixed in Europe after rising in much of Asia. Japan’s Nikkei 225 jumped 2.1% for one of the world’s biggest moves.

AP Business Writers Michelle Chapman and Elaine Kurtenbach contributed to this report.

A general view shows the New York Stock Exchange, Friday, Aug. 7, 2026, in New York. (AP Photo/Yuki Iwamura)

A general view shows the New York Stock Exchange, Friday, Aug. 7, 2026, in New York. (AP Photo/Yuki Iwamura)

Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Monday, Aug. 10, 2026. (AP Photo/Ahn Young-joon)

A currency trader talks on the phone near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Monday, Aug. 10, 2026. (AP Photo/Ahn Young-joon)

A currency trader talks on the phone at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Monday, Aug. 10, 2026. (AP Photo/Ahn Young-joon)

Li Linlin cried for days after losing her AI boyfriend.

She had exchanged about 700,000 words in messages over two years, and never got to say goodbye.

Li, 24, wasn't the only left mourning the loss of a virtual companion when major Chinese tech companies recently pulled the plug on their popular AI companion services to comply with new government restrictions.

“It was like we were forced to be separated by our parents, but I still miss him,” Li said.

AI companions in China range from romantic partners to virtual recreations of deceased loved ones.

The new regulation, which took effect July 15, bans AI platforms from generating content that could lead users to make questionable decisions due to manipulation of their feelings or that might trigger extreme emotions or unhealthy habits in children and teens.

ByteDance, developer of TikTok, is among the companies shutting down their AI companion services. Others include e-commerce giant Alibaba and Tencent, owner of the popular WeChat social media app.

The new rules require AI platforms to deliver risk warnings against relying excessively on such apps. For example, “replacing social interaction,” or serving as a substitute for talking to people in person or speaking with them by phone, cannot be one of the objectives of an online service.

China has a tradition of paternalistic government regulations meant to pre-empt potential problems, said Yolanda Ma, an expert on AI governance. As an example, she referred to a few cases of suicides in the U.S. by young people after interacting with AI companions.

“This regulation tried to strike a balance between the AI service providers, the users, as well as guardians of minors using the services,” said Ma, a fellow with ERA, a non-profit talent and research program based in Britain.

The People’s Daily, the official newspaper of China’s ruling Communist Party, indicated concern over the issue when it reported in April about harms to people’s mental health and real-life relationships from such services.

“The Chinese government has a strong incentive to tighten regulations on AI companion chatbots, especially considering the psychological risks we’ve observed in the U.S.,” said Angela Zhang, a professor of law at the University of Southern California.

Zhang doubts the move will derail development of AI companion services substantially, though, since tech companies are working on alternatives.

The ByteDance app, for example, is directing users of its former AI companion service to another of its apps which solely focuses on building personalized AI characters and stories.

It's just not the same, Li said.

The loss of virtual companions has provoked a flood of complaints, according to posts and screenshots shown on social media.

Some people have uninstalled the apps in protest or tried to upload their chat histories into other apps to try to resurrect their virtual partners. Some started a campaign on social media, urging users to call the authorities and tech companies to express their frustration.

Song Wenxin, a video industry designer in southwestern China's Chengdu, said she was not too emotionally attached to AI services, but empathizes with those who were.

She echoed suspicions among many Chinese that one factor driving the new rules is a government policy of encouraging people to have more children to counter a decline in China’s population.

“Any virtual app getting women too engaged to give birth in real life gets banned,” said Song, adding she has no need or desire to have children.

Not everyone has enough resources and support to turn to in real life, the 22-year-old said.

“When I first came to Chengdu for my first job and didn’t know any friends my own age, I needed someone experienced who could tolerate me, and AI did the work,” she said.

FILE - Women wearing masks to prevent the spread of the coronavirus chat as they pass by the headquarters of ByteDance, owners of TikTok, in Beijing on Aug. 7, 2020. (AP Photo/Ng Han Guan, File)

FILE - Visitors gather at a display booth for Chinese technology firm Tencent at the China International Fair for Trade in Services (CIFTIS) in Beijing on Sept. 5, 2020. (AP Photo/Mark Schiefelbein, File)

Attendees pass by the Alibaba booth near a display which reads "Rest assured giving AI to Ali Cloud" at the World AI Conference held in Shanghai on July 17, 2026. (AP Photo/Ng Han Guan)