US stocks experienced a significant rebound on Monday, paring last week's slump, as chipmakers led the market's recovery. The S&P 500 Index rose by 0.6%, while the Nasdaq 100 Index climbed 1.3%. This recovery was notably driven by semiconductor companies, with the Philadelphia Stock Exchange Semiconductor Index (SOX) gaining 3.1% after having entered a bear market on Friday. The rebound occurred ahead of a wave of earnings reports that will reveal whether Big Tech's profits can meet high expectations.
Key technology stocks showed strong performance. Nvidia's stock rose by 1.3% before it reported better-than-expected profit and revenue for the latest quarter, along with an optimistic revenue forecast for the current quarter, which positioned it as a primary driver for the S&P 500's gains. Other semiconductor leaders, Advanced Micro Devices and Intel, also saw substantial increases, up 8.1% and 7.4% respectively.
The broader market received a lift from the easing of bond market yields, which had previously rattled stock markets globally. Lower yields are particularly beneficial for smaller companies that often rely on borrowing for growth, leading the Russell 2000 index of smaller US stocks to jump 2.6%, more than double the gain of the S&P 500. This relief in the bond market, combined with rebounding tech stocks, contributed to the overall positive market sentiment.
