Nasdaq climbs as chip and AI-linked stocks bounce back
- ^IXIC
Oct 19 (Reuters) – The tech-heavy Nasdaq Composite led Wall Street gains on Monday as investors returned to the chip sector and other AI-related stocks following last week’s bruising selloff, while investors waited for key corporate earnings reports.
The benchmark S&P 500 and the Nasdaq had marked their biggest weekly declines since late June on Friday, as concerns that higher interest rates could curb investments in AI infrastructure weighed on technology stocks, particularly chip companies and data center operators.
The selloff reflected mounting investor unease over how costly AI developments will be financed, a question that has increasingly pressured companies underpinning the US bull market, which recently marked its fourth anniversary.
The Philadelphia Semiconductor Index snapped an eight-day losing
The Philadelphia Semiconductor Index snapped an eight-day losing streak in which it fell about 15.7% for its longest run of declines since October 2008.
“Rubber bands can only stretch so far in one direction before they snap and start reversing, and you finally saw that enough-is-enough moment in the semiconductors after Friday’s close,” said Michael James, managing director and equity sales trader at Rosenblatt Securities in Los Angeles.
“Nothing changed between Friday’s close and this morning’s open, other than nothing bad happened over the weekend, and sentiment had gotten so negative that we were oversold to the point where a bounce was due,” James said.
With a lot of technology company earnings reports
And with a lot of technology company earnings reports due out in coming days and weeks, he cautioned that the market is “far from out of the woods.”
Social media company Meta is due to report results on Wednesday along with electric vehicle company Tesla, while SpaceX is scheduled to report on Tuesday.
According to preliminary data, the S&P 500 gained 32.48 points, or 0.42%, to end at 7,691.07 points, while the Nasdaq Composite gained 290.85 points, or 1.11%, to 26,430.89. The Dow Jones Industrial Average fell 32.21 points, or 0.06%, to 51,970.20.
Energy markets removed some earlier support for equities
Energy markets removed some earlier support for equities as oil price fluctuations tend to impact inflation. US crude oil futures reversed earlier losses to settle up 2.2% at $103.66 a barrel after attacks by Yemen’s Iran-aligned Houthis on a Yemeni military training camp and renewed attacks on Saudi energy, airport and military facilities. [O/R]
During the session, consumer discretionary and technology were leading the gainers among the S&P 500’s 11 major sectors. The defensive utilities and real estate sectors were among the laggards.
