Nasdaq 100 Jumps 1% as Chip Stocks Rebound Before Big Tech Earnings

Nasdaq 100 Jumps 1% as Chip Stocks Rebound Before Big Tech Earnings

U.S. stocks advanced on Monday as semiconductor shares recovered from last week's selloff ahead of a heavy earnings schedule that could test whether Big Tech profits can support elevated market expectations. The S&P 500 Index (SPY) gained 0.4% by 12:36 p.m. in New York, while the Nasdaq 100 Index rose 1% after recording its weakest week in nearly a month. The Philadelphia Stock Exchange Semiconductor Index climbed 2.3% after entering a bear market on Friday. NVIDIA NVDA, an artificial-intelligence chipmaker, gained 1.3%, helping lift a basket of Magnificent Seven companies by 0.6%. Advanced Micro Devices AMD, Intel INTC, and Micron Technology MU, semiconductor companies benefiting from investor interest in artificial intelligence, also moved higher. Sandisk SNDK, a memory-storage company, jumped 6.1%, while Marvell Technology MRVL, a chip and networking company, climbed 6.3%.

The broader technology sector also strengthened, with Alphabet GOOG, Amazon AMZN, and Microsoft MSFT moving higher, although declines in Apple AAPL and Tesla TSLA limited the S&P 500's overall advance. More than 80 companies in the benchmark are scheduled to report results, with Alphabet and Intel expected to provide investors with additional insight into how artificial-intelligence spending is influencing the technology industry. Tesla is scheduled to release its results on Wednesday. Tom Essaye, founder of The Sevens Report newsletter, suggested investors will be looking for strong earnings, continued demand, and evidence that technology companies are maintaining discipline rather than accelerating the current competition in AI-related component spending. Market participation remained relatively narrow, with around 280 S&P 500 stocks declining and slightly more than 220 advancing, while the equal-weighted version of the index was unchanged. Trading volume was also about 20% below the S&P 500's 30-day average, suggesting the semiconductor rebound was the main force behind the session's gains.

Individual stocks posted sharp moves as investors reacted to earnings reports and analyst actions. Lumentum Holdings LITE, a maker of optical and photonic equipment, surged 8% after Barclays upgraded the stock from equal-weight to overweight, making it the strongest performer in the S&P 500. Chipotle Mexican Grill CMG, a restaurant chain, fell about 4% and became the index's biggest decliner. Domino's Pizza, a restaurant chain, gained nearly 2% after second-quarter revenue exceeded analyst estimates, while AMC Entertainment AMC, a movie-theater operator, rallied 22% after second-quarter earnings and revenue surpassed expectations. Fervo Energy rose 5% after Jefferies upgraded the stock from hold to buy following its pullback from its IPO highs. Energy stocks reversed earlier losses and gained nearly 1% as oil prices moved sharply between gains and declines amid headlines surrounding the Middle East conflict. With S&P 500 earnings now forecast to increase 26% and the index trading about 1.5% below its record closing high, upcoming corporate results could play an important role in determining whether the market's rebound can continue.