Chip Stocks Surge, Fueling Nasdaq and S&P 500 Rally

On Monday, the S&P 500 and Nasdaq rose due to a rally in chip stocks, with Broadcom gaining after renewing its Apple partnership. Despite initial gains, the Dow reversed, setting the stage for upcoming second-quarter earnings. Microsoft's job cuts weighed on sentiment, while SpaceX is joining the Nasdaq 100.

The S&P 500 and Nasdaq saw gains on Monday, driven by a resurgence in chip stocks. Broadcom led the charge, rising 4% following the renewal of its partnership with Apple to develop custom chips through 2031. The information technology sector of the S&P 500 climbed by 1.9%, while the Philadelphia SE Semiconductor index rebounded by 3.8%.

Despite early gains in the Dow Jones, which hit a new intraday record before slipping, the focus shifted to the impending start of the second-quarter earnings season. Investors anticipate results from Delta Air Lines and PepsiCo later this week. Meanwhile, Microsoft’s announcement of workforce reductions influenced market perception, reflecting concerns over capital expenditure returns.

Investor sentiment is also shaped by expectations surrounding U.S. Federal Reserve policies. Recent labor reports slightly cooled bets on rate hikes, affecting market dynamics. Furthermore, SpaceX is poised to join the Nasdaq 100, marking another milestone in the tech sector.