Wall Street took a breather Monday after last week's stumble, and the tech-heavy corner of the market did most of the heavy lifting.
The Nasdaq 100 climbed 1%. The Philadelphia Stock Exchange Semiconductor Index, which tracks chipmakers, jumped 2.3%.
Nvidia rose 1.3%. Sandisk jumped 6.1% and Marvell Technology climbed 6.3%. Advanced Micro Devices, Intel, and Micron also rose.
Trading volume on the S&P 500 was about 20% below its 30‑day moving average. The equal‑weight S&P 500 remained flat, indicating broader softness outside semiconductors, with about 280 stocks falling while just over 220 advanced.
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The surge in semiconductor shares comes after a rocky stretch for the industry, which faced headwinds from concerns over weakening demand and geopolitical curbs on exports. But recent executives' remarks have pointed to resilient demand for artificial intelligence chips, supporting investor optimism. Nvidia, a key beneficiary of the AI boom, has seen its stock more than double this year, though its upcoming earnings report will be closely watched for further guidance.
Apple and Tesla were the top point decliners in the S&P 500, limiting the index's advance.
Tom Essaye of The Sevens Report newsletter commented, "Markets will want to see strong results and more signs of robust demand, but also evidence of restraint and a focus on stability and not a further doubling down on the current AI component spending war."
This week also includes initial earnings reports from major auto and industrial firms. Earnings growth for S&P 500 companies is now projected at 26%, one of the highest figures outside of post-recession rebounds.
While semiconductor stocks led the advance, the broader market showed signs of caution. With the Federal Reserve in a quiet period and inflation data coming in softer, all eyes are on corporate earnings to provide direction. The week's reports from major tech and industrial firms will be critical in determining whether the current rally can broaden out beyond AI-related names.
Meanwhile, Federal Reserve policymakers are in a quiet period leading up to their June 29 rate decision, and softer-than-expected June inflation data has reduced market bets on a rate hike later this month. This backdrop adds further weight to earnings season as the primary driver of near-term market direction.
The S&P 500 currently sits roughly 1.5% under its record closing high.
Domino's Pizza gained almost 2% following quarterly revenue that exceeded analyst forecasts. AMC Entertainment jumped 22% as its second-quarter earnings and revenue came in above Wall Street estimates. Fervo Energy climbed 5% after Jefferies raised its rating to buy from hold, citing the stock's recent decline from its IPO peak.
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