Wall Street capped Monday's regular session with fresh record highs for the S&P 500 and Nasdaq, driven by a surge in semiconductor stocks. The rally, however, faces a critical test on Tuesday with the release of the latest Consumer Price Index (CPI) data, which could shift expectations for Federal Reserve policy.
The Dow Jones Industrial Average gained 95.31 points, or 0.19%, to close at 49,704.47. The S&P 500 rose 13.91 points, or 0.19%, to 7,412.84, while the Nasdaq Composite added 27.05 points, or 0.10%, ending at 26,274.13. Both the S&P 500 and Nasdaq set new closing records.
Semiconductor Strength Fuels Rally
The PHLX Semiconductor Index jumped 2.6%, led by strong gains from Intel (INTC), which rose 3.6%, and Qualcomm (QCOM), which surged 8.4% to a record close. “The AI infrastructure trade has taken on a life entirely of its own,” said Ross Mayfield, investment strategy analyst at Baird. The AI-driven momentum continues to underpin market gains, with HSBC raising its year-end S&P 500 target to 7,650 from 7,500, citing robust profit growth. The bank expects first-quarter S&P 500 earnings to climb nearly 29% year-over-year, with AI-focused megacap tech companies leading the charge.
After-Hours Movers
In extended trading, BuzzFeed (BZFD) shares surged after media executive Byron Allen agreed to acquire about 52% of the company for $120 million and become its CEO. The deal comes as BuzzFeed faces headwinds from advertisers shifting budgets to platforms like TikTok and Instagram.
GoPro (GPRO) shares also climbed after the action-camera company announced a review of strategic alternatives, including a potential sale or merger. The move follows unsolicited interest related to its expansion into defense and aerospace markets. Founder and CEO Nicholas Woodman stated that GoPro will consult with advisers to “maximize shareholder value.”
Hims & Hers (HIMS) shares fell over 12% after hours after the telehealth company reported a surprise quarterly loss. Revenue rose 4% to $608.1 million, but the company swung to a net loss of $92.1 million from a profit of $49.5 million a year earlier. The shift to branded GLP-1 weight-loss medications, such as Novo Nordisk’s Wegovy, pressured margins. Hims maintained its full-year revenue outlook of $2.8 billion to $3.0 billion.
Inflation and Fed Outlook
Investors are bracing for Tuesday’s CPI report, with economists polled by Reuters expecting a 0.6% monthly increase. Core CPI, which excludes food and energy, will be closely watched for signs that the recent surge in oil prices is feeding into broader inflation. The data could influence the Federal Reserve’s rate path, which has turned more hawkish in recent weeks. Bank of America Global Research does not expect any rate cuts for the remainder of 2026, while Goldman Sachs has pushed its forecast for the first cut to December from September, citing sticky inflation and a resilient labor market.
The market's narrow leadership in AI-related stocks remains vulnerable to an inflation surprise. An uptick in core CPI, a fresh spike in crude prices, or any escalation in Middle East tensions could keep the Fed on hold and test the sustainability of the current rally.
