S&P 500, Nasdaq close sharply higher as Broadcom rallies
- The San Juan Daily Star
- 10 hours ago
- 2 min read
The S&P 500 and Nasdaq ended sharply higher on Monday, with Broadcom and other chip stocks rallying as investors bought shares in companies related to artificial intelligence that are expected to drive a strong second-quarter earnings season.
Broadcom jumped 3.7% 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%, while the Philadelphia SE Semiconductor index gained 2.2% 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% after the tech heavyweight said it was cutting about 2.1% 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% with over $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 Nasdaq gained 1.12% to 26,121.16 points, while the Dow Jones Industrial Average rose 0.29% to 53,055.91 points.
Even though the S&P 500 rose, declining stocks outnumbered rising ones within the index by a 1.3-to-one ratio.
Following Monday’s gains, the S&P 500 is up about 10% in 2026, and it remains down about 1% from its record high close on June 2.
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