Stocks Climb as Rebound in Chipmakers Gathers Pace: Markets Wrap
(Bloomberg) — Wall Street staged a comeback as dip buyers emerged, lifting stocks amid a rally in chipmakers on bets the artificial-intelligence trade that’s powered the bull market has more room to run.
Investors kept piling back into beaten-down semiconductor companies, with a key industry gauge up 5.2%. Nvidia Corp. said its latest chip designs are making their way to customers. Intel Corp. climbed on plans to cut more jobs. The Nasdaq 100 added 1.9%. Those gains overshadowed geopolitical risks that are boosting oil prices, stoking worries about inflation that could make the Federal Reserve raise rates. Bond yields rose.
The equity market’s best-performing corner this year has been gripped by volatility, with traders gauging whether the massive AI spending will pay off. An opportunity to start rebuilding positions in chipmakers could emerge as the slide in momentum stocks nears its end, according to UBS’ trading desk.
Part of the reason the sector may be finding a floor is that much of the speculative positioning has already been unwound. Hedge funds have cut long positions in momentum and semiconductor shares by about 5% of gross market value, one of the largest reductions on record, according to UBS’ prime brokerage data.
“The recent correction appears more consistent with a healthy reset following a parabolic advance than a fundamental breakdown in the AI investment theme,” said Adam Turnquist at LPL Financial.
Still, with skepticism mounting about the vast sums being poured into data-center development, the upcoming tech results will be highly scrutinized. Tesla Inc. and Alphabet Inc. kick off the megacap reporting season Wednesday. Microsoft Corp., Meta Platforms Inc., Apple Inc. and Amazon.com Inc. hit the following week.
The period will be a defining stretch for earnings, and not just for tech. The broader message is: Companies that fail to clear Wall Street’s elevated bar are being punished, according to Bret Kenwell at eToro.
“The burden of proof has changed. Investors are no longer asking whether companies can withstand the uncertainty,” he said. “They want growth and guidance strong enough to justify elevated valuations.”
Overall, the nascent earnings season has been solid. More than 90% of the S&P 500 companies reporting results so far have beaten profit estimates, according to data compiled by Bloomberg.
“We see room for global stocks to move higher amid strong profit growth,” said Mark Haefele at UBS Global Wealth Management. “The wide gaps between individual stock performance and ongoing risks related to geopolitics and inflation, however, mean that investors should ensure diversified exposure.”
Corporate Highlights:
Apple Inc. is preparing to launch Apple Upgrade, a leasing program that will mark one of the biggest-ever changes to how it sells devices. Concerns about the impact AI will have on software companies prompted Morgan Stanley to downgrade Adobe Inc. and Salesforce Inc. alongside several other stocks in the sector. OpenAI Chief Executive Officer Sam Altman plans to brief the Trump administration and US lawmakers next week on the upcoming generation of AI models as the US works to create a process to review the safety of cutting-edge systems, according to a senior company executive. 3M Co. topped Wall Street’s profit expectations and raised its full-year outlook, a sign that the conglomerate’s slow-and-steady turnaround effort is proceeding despite broader economic volatility. General Motors Co. raised its full-year profit forecast by another $500 million after beating earnings estimates, powered by stronger margins on its largest vehicles and lower tariff costs. Hasbro Inc. jumped after the toy company reported earnings that beat analysts’ expectations and raised its full-year outlook based on the strength of its Magic: The Gathering card game business. What Bloomberg Strategists Say…
“After a historic unwind in momentum stocks that was largely driven by extended positioning, the earnings season is shifting the market’s focus back to fundamentals and profit growth.”
—Tatiana Darie, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.9% as of 4 p.m. New York time The Nasdaq 100 rose 1.9% The Dow Jones Industrial Average rose 0.7% The MSCI World Index rose 0.9% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.1% to $1.1402 The British pound fell 0.4% to $1.3380 The Japanese yen fell 0.4% to 163.22 per dollar Cryptocurrencies
Bitcoin rose 1.6% to $66,363.1 Ether rose 0.9% to $1,921.23 Bonds
The yield on 10-year Treasuries advanced four basis points to 4.63% Germany’s 10-year yield advanced one basis point to 3.16% Britain’s 10-year yield was little changed at 5.03% Commodities
West Texas Intermediate crude rose 2% to $84.91 a barrel Spot gold rose 1.9% to $4,085.83 an ounce ©2026 Bloomberg L.P.
