US equities saw an uplift driven by a rebound in semiconductor stocks, which helped the S&P 500 halt a recent decline. A gauge of semiconductor giants, including Nvidia Corp. and Broadcom Inc., climbed by 2.3% after experiencing a bear market last week. Alphabet Inc. also advanced over 3% after reports indicated Google is developing a new server chip designed to optimize its Gemini artificial intelligence model. This resurgence in chipmakers and AI infrastructure stocks contributed significantly to the overall market's positive movement.
The recovery in the tech sector, particularly chipmakers, was a major theme, with the iShares Semiconductor ETF (SOXX) rising by 2%. Several individual chip stocks saw substantial gains, including Western Digital (WDC) up over 4%, and Intel (INTC), Advanced Micro Devices (AMD), Seagate Technology Holdings Plc (STX), and Sandisk (SNDK) all up more than 3%. Applied Materials (AMAT), Marvell Technology (MRVL), Microchip Technology (MCHP), and Texas Instruments (TXN) also increased by over 2%. Teradyne (TER) led the S&P 500 and Nasdaq 100 gainers, soaring over 7% after UBS raised its price target on the stock from $440 to $500.
Simultaneously, crude oil prices receded from earlier highs, providing further support to the stock market. WTI crude oil (CLQ26) had initially surged to a 5-week high due to reduced traffic through the Strait of Hormuz amidst escalating tensions between the US and Iran. However, prices pared gains after Iran indicated ongoing diplomatic efforts and mediation proposals from Qatar and Pakistan for a 10-day cessation of strikes, alleviating some geopolitical concerns and improving risk sentiment. Forecasts compiled by Bloomberg Intelligence suggest an optimistic outlook for Q2 earnings, with an expected increase of +23%, primarily driven by AI spending, which is projected to account for nearly 60% of the S&P 500's earnings-per-share growth.
