Tech Stocks Rebound as US Indices Reach New Highs
US stock indices closed higher on Monday, with the Dow Jones index reaching record highs. The S&P 500 rose 0.8%, while the Nasdaq 100 gained 1.3% and the Dow Jones Industrial Average added 0.3%. Nvidia Corp. stated that its roadmap remains intact after a report on server delays.
Microsoft shares fell almost 1% following the company's announcement of job cuts targeting about 2.1% of its global workforce. The chipmaker sector experienced gains, led by Nvidia and Broadcom stock. The State Street Technology Select Sector SPDR ETF (XLK) climbed almost 2%, with Western Digital rising 7% and Teradyne increasing 2.8%. This comes after technology stocks dropped significantly in the previous week due to investor concerns over AI demand and capex plans.
According to Mark Haefele, chief investment officer at UBS, investors will look for signs that tech's recent volatility is stabilizing. Morgan Stanley strategists warned that momentum in chip stocks is fading as investors shift focus to hyperscalers, with Microsoft, Amazon, and Meta being favored among AI hyperscalers.