A recovery in chipmaking stocks, including a 2.3% climb in a gauge of semiconductor giants like Nvidia Corp. and Broadcom Inc., propelled Wall Street gains, contributing to the S&P 500 ending a two-day slide. The Nasdaq 100 also advanced by nearly 1%. This rebound occurred after the semiconductor index had entered a bear market last week. Alphabet Inc. saw gains as The Information reported Google's development of a new server chip incorporating its Gemini AI model blueprint.
Despite the positive movement in tech, the broader market experienced volatility, with the Dow Jones Industrial Average falling 0.2%. Oil prices fluctuated considerably, influenced by evolving news regarding a potential peace deal between the US and Iran and threats from the Houthi group to blockade Saudi Arabia. West Texas Intermediate crude initially fell 0.2% to $82.29 a barrel before later rising 1.3% to $83.55 a barrel as geopolitical tensions remained high. Spot gold fell 0.3% to $4,006.46 an ounce.
Analysts are keenly watching the upcoming earnings reports from major technology companies, starting with Tesla Inc. and Alphabet Inc. on Wednesday, followed by Microsoft Corp., Meta Platforms Inc., Apple Inc., and Amazon.com Inc. the following week. Nvidia reports later next month. Citigroup Inc. strategists, led by Scott Chronert, suggested that the "Magnificent Seven" moniker is no longer relevant for assessing the AI trade, instead recommending a focus on a broader "growth cluster" of equities driving S&P 500 earnings and share-price gains. Hedge funds have also significantly pulled back from US tech stocks, recording the fastest selling pace in two months, according to Goldman Sachs Group Inc.'s Prime Services, indicating a potential "capitulation" among some tech investors.
