U.S. stocks saw a rebound on Monday, primarily driven by a recovery in AI-related companies. The S&P 500 rose by 0.7% to 7,537.54, pulling back within 1% of its all-time high, even though more stocks within the index declined than advanced. The Nasdaq composite climbed 1.1% to 26,121.16, and the Dow Jones Industrial Average set a new record, increasing by 155 points (0.3%) to 53,055.91. This upward movement was largely attributed to strength in the artificial intelligence technology industry, with some investors questioning the sustainability of the intense capital flow into AI. Analysts expect S&P 500 companies to increase their earnings by an aggregate 24% year-over-year in the second quarter, with tech sector earnings projected to jump around 65%.
Broadcom was a significant contributor to the S&P 500's rise, gaining 3.7% after announcing long-term agreements to supply silicon products to Apple through 2031. This followed a period of recent losses for Broadcom. In other AI news, TeraWulf saw a 4.9% increase after securing a 20-year deal with Anthropic to use its Kentucky data center, a deal expected to generate approximately $19 billion in revenue as TeraWulf shifts its focus from Bitcoin mining to high-performance computing. South Korean memory maker SK Hynix plans to raise $28 billion through a U.S. stock offering on Nasdaq later this week, which would be one of the largest U.S. offerings ever, following SpaceX's $75 billion IPO last month.
SpaceX, which owns the xAI business, saw an initial gain erased, ending the day down 1% with over $26 billion worth of its shares exchanged. The company is scheduled to join the Nasdaq 100 index, which will necessitate related exchange-traded funds like QQQ to purchase its shares. Microsoft shares fell almost 1% after the company announced it would eliminate approximately 4,800 jobs, representing about 2.1% of its global workforce.
In the oil market, prices remained relatively flat. Brent crude fell 0.2% to $71.99 per barrel, hovering around levels seen before the U.S. and Israel attacked Iran in late February. U.S. crude was steady at $68.69 a barrel. This softness in prices followed an announcement by OPEC+ that seven of its members plan to collectively expand oil production by 188,000 barrels per day in August, marking the fifth consecutive month of increased output, a factor that typically puts downward pressure on oil prices. Easing oil prices are contributing to a deceleration in services inflation, according to data from the Institute for Supply Management, which also reported a dip in U.S. services sector activity in June but a rebound in employment.
