Wall Street Snaps Chip Slump as Tech Stocks Rebound
Wall Street bounced back as chip stocks snapped a nine-day losing streak, led by Nvidia and AMD. Meanwhile, bond yields climbed and inflation data kept investors on edge.
Wall Street investors returned to chip stocks, snapping a nine-day losing streak—the longest slump for the sector in two decades. The Nasdaq rose 1.1%, the S&P 500 gained 0.4%, while the Dow Jones fell 0.1%.
Chip Stocks Recovery and Market Divergence
The SOXX semiconductor ETF surged by over 2%, halting a nine-day slide that began in 2006. The recovery followed a harsh week where the fund lost more than 10% amid concerns over heavy AI debt loads. Nvidia, AMD, Micron, and Marvell Technology posted gains.
However, the tech rebound was not universal. CoreWeave dropped 0.4%, continuing to bear the brunt of AI sector anxieties, even after Goldman Sachs upgraded the stock and recommended buying the dip.
Analyst Upgrades and Major Tech Moves
Intel rose 2.43% after JPMorgan upgraded its rating from underweight to neutral. Additionally, Tesla agreed to use Intel's upcoming 14A advanced manufacturing process, while Intel reported progress on its 18A chip yield and announced a $20 billion capital raise for fab expansions.
Amazon climbed as Morgan Stanley named it a top pick, raising its price target from $335 to $350, representing a potential 40% upside from Friday's close.
Inflation and Bond Yields
Beneath the surface of the main indexes, seven out of eleven S&P 500 sectors declined. Meanwhile, the consumer discretionary sector jumped 2.7%, driven by Amazon and Tesla.
In the bond market, the 10-year U.S. Treasury yield climbed over 4 basis points to 5.14%, while the 30-year yield reached 5.477%. Investors continued digesting sticky inflation data, as the Consumer Price Index rose 0.6% monthly and 3.7% annually.
