The Nasdaq Composite rallied 0.86% on Monday, recovering from Friday's selloff as semiconductor stocks led the charge. The tech-heavy index added 220.23 points to close at 25,929.66. The S&P 500 rose 0.30%, gaining 21.99 points to 7,405.73, while the Dow Jones Industrial Average slipped 80.77 points, or 0.16%, to 50,786.01.
The Philadelphia SE Semiconductor Index surged 5.6%, and S&P 500 technology shares advanced 1.5%. The rebound was driven by bargain hunting after last week's sharp declines. “After the tech selloff, buyers stepped in, viewing the dip as an opportunity,” said Rick Meckler of Cherry Lane Investments. However, he cautioned that with valuations near perfection, markets remain vulnerable to sharp moves.
Intel Corp (NASDAQ: INTC) was the standout, jumping 11.2% after The Information reported that Google ordered more than 3 million tensor processing units for delivery in 2028. Marvell Technology Inc (NASDAQ: MRVL) rose 9.6% ahead of its addition to the S&P 500 index. Broadcom Inc (NASDAQ: AVGO) gained 2.8%, while Qualcomm Inc (NASDAQ: QCOM) added 3.69% in after-hours trading to $225.80.
Apple Inc (NASDAQ: AAPL) bucked the trend, falling 1.9% after unveiling new AI features at its Worldwide Developers Conference. Bruce Zaro of Granite Wealth Management described the drop as a “sell-on-the-news” event, noting that investors still view Apple as lagging behind peers in AI development.
In after-hours trading, the SPDR S&P 500 ETF Trust (NYSE: SPY) edged up 0.01%, the Invesco QQQ Trust (NASDAQ: QQQ) gained 0.02%, and the SPDR Dow Jones Industrial Average ETF (NYSE: DIA) slipped 0.04%. Strong volume was observed in Meta Platforms Inc (NASDAQ: META), Microsoft Corp (NASDAQ: MSFT), Broadcom, Nvidia Corp (NASDAQ: NVDA), and Apple.
Investors are now focused on Wednesday’s May Consumer Price Index (CPI) report, due at 8:30 a.m. ET from the Bureau of Labor Statistics. The data is seen as the next key catalyst for growth and tech stocks. A stronger-than-expected reading could push Treasury yields higher and reignite concerns that the Federal Reserve will maintain higher interest rates.
The New York Fed’s May survey showed one-year inflation expectations dipped to 3.5% from 3.6%, while three- and five-year expectations held steady at 3.1% and 3.0%, respectively. The survey also indicated households are feeling more pessimistic about credit access and their financial situations.
Citi raised its S&P 500 year-end target to 8,100 from 7,700, citing stronger earnings and AI investment. However, bank strategists warned that concerns persist about the sustainability of AI-driven growth beyond 2027, particularly after last week’s chip stock decline.
Market analyst Fabien Yip of IG noted that leveraged trades and the upcoming CPI report could fuel further volatility in growth stocks. “Stocks bounced Monday, but gains may be limited if the CPI comes in hot,” he said. “The market remains on edge after Friday’s sharp selloff.”
Last Friday, the Dow fell 1.35%, the S&P 500 dropped 2.64%, and the Nasdaq tumbled 4.18%, with chip stocks posting their steepest daily decline since March 2020, triggered by strong payrolls data that revived rate-hike fears.
