U.S. stock markets posted gains on Monday, but the advance was largely confined to a select group of artificial intelligence and semiconductor companies. The S&P 500 rose 0.72% to close at 7,537.48, the Nasdaq Composite climbed 1.16% to 26,131.63, and the Dow Jones Industrial Average edged up 0.30% to finish at 53,056.80, after briefly crossing the 53,000 threshold during the session.
Despite the headline gains, market breadth remained weak. According to Reuters data, declining stocks on the S&P 500 outnumbered advancing ones by a ratio of 1.3 to 1. The Associated Press reported that most individual names in the benchmark index fell on the day. This divergence was reflected in ETF performance: the SPDR S&P 500 ETF (SPY) gained roughly 0.98%, while the Invesco S&P 500 Equal Weight ETF (RSP) was virtually flat. Meanwhile, the iShares Semiconductor ETF (SOXX) surged 3.39%, underscoring the chip-driven nature of the rally.
The narrowness of the advance is a concern for investors with diversified portfolios. When gains are concentrated in a handful of mega-cap tech and semiconductor stocks, broader funds may underperform even as the S&P 500 rises. This dynamic also leaves corporate earnings with less cushion for potential misses. Jake Dollarhide, CEO of Longbow Asset Management, commented, “This is a market that’s leaving a lot of people out. If you’re not in some tech names or semiconductors, then you’re basically missing the entire rally.”
Broadcom (AVGO) was a standout, rising 4.4% after announcing an extension of its chip partnership with Apple (AAPL) through 2031. Apple shares gained 1.5%. Analysts estimate that Apple accounts for approximately one-fifth of Broadcom’s annual revenue. “For Apple, locking in Broadcom through 2031 buys supply-chain certainty,” noted Jacob Bourne of Emarketer.
In the AI infrastructure space, TeraWulf (WULF) advanced 5.1% after providing details on a major deal. Anthropic has signed a 20-year lease for an AI campus to be built in Hawesville, Kentucky, with TeraWulf expecting around $19 billion in contracted revenue. The campus is designed for about 401 megawatts of IT load, with initial operations slated for the second half of 2027 and full capacity by early 2028. CEO Paul Prager called the lease a “validation” of the company’s strategy.
Microsoft (MSFT) slipped 0.85% after announcing 4,800 job cuts, or roughly 2.1% of its workforce, with 3,200 positions coming from the Xbox division. Analysts at D.A. Davidson noted that the cuts are aimed at freeing up capital for AI spending.
Investor attention is now turning to earnings season. According to LSEG I/B/E/S data, S&P 500 second-quarter earnings are expected to rise 24% year over year, with the technology sector forecast to post nearly 65% growth. However, Trading Economics’ model projects the S&P 500 could decline to 7,330 by the end of the quarter and to 6,877 over the next 12 months.
In other AI-related news, SK Hynix launched a $28.07 billion share sale in U.S. markets, with big investors reportedly showing interest for up to $7 billion. Samsung Electronics is set to report earnings Tuesday, with analysts expecting profits to jump 18-fold. This week’s macro calendar is lighter, with the Federal Reserve’s minutes from Chair Kevin Warsh’s first meeting due Wednesday. Steve Englander of Standard Chartered expects Warsh to make the minutes “less informative.” Delta Air Lines and PepsiCo are also scheduled to report later this week.
