NEW YORK: The S&P 500 and the Nasdaq rose on Monday as chip stocks recovered from last week’s sharp selloff, while investors looked ahead to earnings from major technology companies that have driven Wall Street’s AI-fueled rally.
Alphabet added to the gains, rising 2.9 percent after a report said its Google unit is developing a Gemini-integrated server chip aimed at improving AI efficiency and easing computing-capacity constraints.
The second-quarter earnings season will pick up pace this week, with results due from Alphabet, Tesla, Intel and IBM.
Investors will focus closely on Intel and Texas Instruments for any encouraging signs after a recent slide in semiconductor shares.
A surge in AI capital spending by hyperscalers has been a major driver behind this year’s market gains, lifting chip stocks and other companies that are seen as the beneficiaries of the buildout, and helping Wall Street climb to record levels.
But last week’s selloff raised concerns that valuations had run too far, too fast.
The Philadelphia SE Semiconductor Index ended Friday more than 20 percent below its late-June record high, confirming a bear-market decline. The gauge was up 1.9 percent on Monday.
“Our expectation is that earnings will continue to be good. It’s just a little bit harder to tell if they will be better than expected because there’s such a high bar at this point,” said Chris Zaccarelli, chief investment officer for Northlight Asset Management.
Markets are expecting S&P 500 earnings growth of 26 percent for the second quarter, year-on-year, up from an earlier estimate of 23.7 percent, according to data compiled by LSEG.
At 11:49 a.m. ET, the Dow Jones Industrial Average fell 123.88 points, or 0.24 percent, to 52,022.54, the S&P 500 gained 20.88 points, or 0.28 percent, to 7,478.57 and the Nasdaq Composite gained 147.22 points, or 0.58 percent, to 25,667.46.
Memory chipmakers were leading the gains among semiconductor stocks. Micron Technology and SanDisk were up 4.8 percent and 6 percent, respectively.
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