Chip Stocks Rally in AI Trade Revival After Plunge: Markets Wrap
(Bloomberg) — Wall Street staged a comeback as dip buyers emerged, lifting stocks amid renewed enthusiasm over artificial intelligence and bets that a solid economy will keep powering Corporate America.
The high-profile group of chipmakers such as Nvidia Corp. and Micron Technology Inc. paced gains in equities, climbing 5.6% after the biggest selloff since 2020. Their rebound was enough for the S&P 500 to resume its advance from war-fueled lows, though most of the gauge’s companies fell. The Nasdaq 100 rose 1.6%. Apple Inc. investors gave a tepid reception to the next generation of its AI platform, with the shares dropping 1.9%.
Following a brief pause in the rally that drove stocks to a series of all-time highs, momentum-chasing traders returned, energizing bets the bull market is nowhere near its end. Also helping sentiment was the fact that oil pared its surge as Iran and Israel pledged to ease strikes that threatened peace talks.
The positioning-driven rout in equities at the end of last week was a “healthy reset,” according to Morgan Stanley’s Mike Wilson, who maintained his constructive outlook, supported by earnings and strong economic data.
“Markets rarely move in a straight line at the pace seen since the March lows,” he said. “A correction was inevitable and ultimately healthy if this bull market is going to extend into year-end, which remains our baseline with an 8,000 S&P 500 target.” The gauge closed slightly above 7,400.
His optimism was echoed by Citigroup Inc. strategists led by Scott Chronert, who raised their year-end target for the S&P 500 to 8,100 from 7,700, after a “big step up” in earnings expectations.
“We do not expect investors to lose confidence in the AI outlook,” said Mark Haefele at UBS Global Wealth Management. “Although tech stocks have come under pressure in recent days amid concerns about whether expectations can be met, business fundamentals remain strong.”
Haefele also noted that markets continue to overstate the “hawkishness” of top central banks. In his view, the risk of a Federal Reserve rate hike remains low, and despite the increase in jobs, he bets policymakers are likely to be reassured by the slowing of wage growth.
After Friday’s blowout payrolls report, the focus shifted back to inflation. The May consumer price index due Wednesday is expected to jump by 4.2% from a year earlier — the highest rate in more than three years. But the core CPI is seen cooling slightly on a monthly basis — potentially providing a welcome signal to Fed officials.
The question is whether the market resilience can hold as investors digest inflation data and a wave of high-profile IPOs and equity offerings, according to Mark Hackett at Nationwide. They could provide an important test of whether traders are rotating capital into new opportunities or becoming more cautious on risk assets, he added.
Corporate Highlights:
SpaceX’s initial public offering is well oversubscribed, according to people familiar with the matter, as demand builds for a potentially record-setting debut. Amazon.com Inc. is set to sell C$14 billion ($10 billion) of investment-grade bonds, the largest corporate bond offering on record in the currency, in a deal that drew around twice that amount in demand. Ciena Corp. is planning to raise $2 billion by issuing debt that can be converted into shares, joining the ranks of companies capitalizing on the demand from a massive buildout of AI infrastructure. Intel Corp. surged after the Information reported that Alphabet Inc.’s Google will rely on it for more than 3 million specialized AI chips in 2028. Marvell Technology Inc. and Flex Ltd. will join the S&P 500 in the latest quarterly rebalance, replacing Pool Corp. and Campbell’s Co. before the start of trading on June 22. What Bloomberg strategists say…
“S&P 500 history suggests it takes a confluence of valuation, tightened financial conditions and economic weakness to tip the balance of a bull market.”
—Edward Harrison, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.3% as of 4 p.m. New York time The Nasdaq 100 rose 1.6% The Dow Jones Industrial Average fell 0.2% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1531 The British pound was little changed at $1.3341 The Japanese yen was little changed at 160.22 per dollar Cryptocurrencies
Bitcoin rose 2.4% to $63,325.82 Ether rose 3.5% to $1,685.43 Bonds
The yield on 10-year Treasuries advanced four basis points to 4.57% Germany’s 10-year yield advanced two basis points to 3.06% Britain’s 10-year yield advanced four basis points to 4.94% Commodities
West Texas Intermediate crude rose 1% to $91.42 a barrel Spot gold was little changed ©2026 Bloomberg L.P.
