Broadcom jumped 3.7 percent after the chipmaker and Apple agreed to extend a deal through 2031 to develop and supply a range of custom chips.
The S&P 500 information technology sector index climbed 1.3 percent, while the Philadelphia SE Semiconductor index gained 2.2 percent after two straight sessions of losses.
“This is a market that’s leaving a lot of people out. If you’re not in certain tech names, if you’re not in semiconductors, then you’re basically missing the entire rally,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
“I think it’s a very tenuous rally. There is a risk, particularly if the Fed continues to see higher interest rates for longer.”
Taking advantage of massive investor demand for AI-related chip stocks, South Korea’s SK Hynix was set to debut on the Nasdaq later this week.
Microsoft shares fell almost 1 percent after the tech heavyweight said it was cutting about 2.1 percent of its workforce, or roughly 4,800 jobs.
“What the market is saying is Microsoft can’t afford all of its CapEx and there’s not a clear return on invested capital yet. Therefore, laying off people in lieu of moderating CapEx spend is perceived as a negative,” said Thomas Hayes, chairman at Great Hill Capital LLC.
In economic data, the Institute for Supply Management said its non-manufacturing purchasing managers index edged down to 54.0 last month, matching expectations.
SpaceX dipped 1 percent with over US$26 billion worth of its shares exchanged, most of that in the final seconds of the session. Elon Musk’s rocket and AI giant is set to join the tech-heavy Nasdaq 100 on Tuesday.
The S&P 500 climbed 0.7 percent to end the session at 7,537 points. The Nasdaq gained 1.1 percent to 26,121 points, while the Dow Jones Industrial Average rose 0.3 percent to 53,055 points.
With major US companies set to begin reporting quarterly earnings in the next few days, investors have high expectations. Analysts expect S&P 500 companies to increase their earnings by an aggregate 24 percent year-over-year in the second quarter, according to LSEG.
Delta Air Lines and PepsiCo are set to report results later in the week. Following a cooler-than-expected jobs report last week, traders see a 25 percent chance of a 25-basis-point rate hike at the central bank’s July 29 meeting, according to CME’s FedWatch tool. (Reuters)
