Wall Street moved higher on Monday as chip stocks recovered from a sharp weekly decline. The NASDAQ Composite rose 0.92%, while the S&P 500 gained 0.60%. The Dow Jones Industrial Average added 0.15% by 9:50 a.m. Eastern time.
Technology and communication services led the S&P 500 advance. Investors also prepared for quarterly reports from Alphabet, Tesla, Intel, IBM, and Texas Instruments. These results will test expectations after AI spending drove much of the market’s 2026 rise.
The Philadelphia Semiconductor Index rose 2.5% on Monday after entering bear-market territory on Friday. The index had closed more than 20% below its late-June record. This decline followed broad selling across chipmakers and AI-linked shares.
Micron Technology gained 5.1%, while SanDisk rose 5.4%. NVIDIA, AMD, and other chipmakers also recovered part of their prior losses. The sector’s rebound helped the NASDAQ outperform the Dow during morning trading.
Chip stocks now carry more weight in major indexes as their market values have increased. Large daily moves in a few semiconductor companies can influence the NASDAQ and S&P 500. Recent selling showed how quickly traders can reduce exposure when valuations face pressure.
Jack Herr, senior investment analyst at GuideStone Funds, said there was “a little less room for error” in the market. He added that earnings news or other events could push stocks lower as expectations rise.
Alphabet shares gained 3.4% after a report said the company was developing new chips for its AI models. The move supported gains in communication services and information technology stocks.
Alphabet will report quarterly results later in the week. Investors will examine revenue growth, cloud demand, AI spending, and profit margins. The results may also show how the company’s capital spending plans affect chip demand.
Intel and Texas Instruments will provide another view of semiconductor conditions. Their reports will cover demand across data centers, personal computers, industrial systems, and other markets. Intel’s update will also test its turnaround plan.
LSEG data showed analysts expect S&P 500 earnings to grow 26% from a year earlier. That forecast increased from 23.7%. Higher estimates place more pressure on large companies to meet market expectations.
Oil prices moved sharply as traders followed the conflict involving the United States, Israel, and Iran. Brent crude traded between about $86 and $91 before easing near $88. U.S. crude also reversed an earlier increase.
Iran said communication through intermediaries remained open, which supported hopes for talks. Military exchanges continued, while Yemen’s Iran-aligned Houthis announced a naval blockade against Saudi Arabia.
The blockade raised concerns about energy shipments and trade routes. Higher oil prices can increase transport and production costs. They can also add pressure to inflation and Treasury yields.
The 10-year Treasury yield rose to 4.58% from 4.55% on Friday. Markets assigned about a 15% chance to a quarter-point Federal Reserve rate increase at the July meeting, according to CME FedWatch.
Domino’s Pizza rose 3.6% after its second-quarter revenue exceeded Wall Street estimates. The company joined several non-technology stocks that advanced during the session.
Advancing stocks outnumbered decliners by 1.14 to one on the New York Stock Exchange. The ratio stood at 1.11 to one on the NASDAQ. S&P 500 recorded eight new 52-week highs and one new low.
The NASDAQ posted 31 new highs and 55 new lows. This split showed the advance relied heavily on larger technology names. Traders will follow company results for evidence that earnings can support current valuations.
Also Read: Apple Price Hikes Spark Supplier Dispute as Micron Cites 2023 Pricing Pressure