The Dow Jones Industrial Average crossed the 53,000 threshold for the first time on Monday, as a Broadcom-led rally in semiconductor stocks lifted the broader market. The S&P 500 rose 0.7%, and the Nasdaq Composite advanced 1.1%, snapping a two-session losing streak for chip shares. The Dow added 155 points, or 0.3%, after briefly touching the milestone intraday.
Broadcom-Apple Deal Sparks Chip Rebound
Broadcom shares surged after the company and Apple extended their custom chip partnership through 2031, reigniting investor interest in artificial intelligence-related semiconductor stocks. The announcement boosted the S&P 500 Information Technology sector and drove the Philadelphia Semiconductor Index higher after consecutive declines.
The Technology Select Sector SPDR ETF gained 2%, led by a 7% jump in Western Digital. Teradyne rose roughly 2%, while Marvell Technology and Oracle each added about 2%. The rebound followed a period of rotation out of tech into other sectors last week.
South Korean memory chipmaker SK Hynix is set to debut on the Nasdaq later this week, underscoring sustained demand for AI-focused semiconductor companies. For context on recent chip market dynamics, see Nvidia Lags Chip Rally as Kyber Delay, Rotation to Broader AI Spending Weigh.
Earnings Season and Fed in Focus
Market attention is shifting to the second-quarter earnings season, with analysts projecting strong profit growth. According to LSEG I/B/E/S estimates, S&P 500 companies are expected to report aggregate earnings growth of 24% year over year, while technology sector earnings are forecast to rise roughly 65%.
Delta Air Lines and PepsiCo are among the major firms reporting later this week. Economic data showed the Institute for Supply Management's non-manufacturing PMI edged down to 54.0 in June, matching expectations.
Following last week's cooler-than-expected U.S. jobs report, traders now see a 25% probability of a 25-basis-point rate hike at the Federal Reserve's July 29 meeting, per CME's FedWatch Tool. Investors await the Fed's minutes from its latest policy meeting, due Wednesday. Fed Governor Christopher Waller noted that forward guidance can be a valuable tool but cautioned against inflexible application.
Mixed Corporate Moves
Despite the broader rally, Microsoft shares declined after announcing plans to cut about 4,800 jobs, or roughly 2.1% of its workforce. The move was seen as another sign of pressure on large tech firms balancing capital spending with profitability.
O'Reilly Automotive shares fell following a Bloomberg News report that the company had submitted a cash offer to acquire Genuine Parts, whose shares also declined. Analysts noted that investor enthusiasm remains concentrated in a relatively narrow group of technology and semiconductor companies. For a broader view of market breadth, see US Stock Funds See $17.2B Weekly Outflow, Largest Since March: Rally Fatigue?.
This article is for informational purposes only and does not constitute financial advice.
