Memory chip index surges 11.2% as tech stocks lead market rebound

The S&P 500 rose 0.9% Tuesday, snapping a three-session losing streak as memory chip stocks surged 11.2% and the tech sector gained 2.4%.

"The selloff in AI infrastructure stocks has created a strong entry point for investors, as chip shortages show no signs of abating," Morgan Stanley analysts wrote in a note Monday, arguing that memory prices remain supported by insatiable demand from data center buildouts.

The Nasdaq 100 jumped 1.9%, led by Nebius Group's 19% surge after Nvidia disclosed a more than 9% stake in the Dutch AI infrastructure firm. SanDisk advanced 14%, Western Digital rose 12.5%, and Seagate Technology gained 11.2%, while Intel climbed 8.8%. The iShares Semiconductor ETF added 3.5% and the Roundhill Memory ETF jumped 7%. On the downside, Adobe fell 3.1%, CrowdStrike dropped 3.7%, and Workday declined 3.9%.

The rebound comes ahead of a pivotal week for Big Tech earnings, with Alphabet and Tesla reporting after Wednesday's close. The S&P 500's tech sector had fallen 2.9% last week — its first weekly loss since early June — as concerns about stretched AI valuations and a surprise breakthrough from Chinese startup Moonshot rattled investors. The Cboe Volatility Index, or VIX, eased from last week's elevated levels as buying returned to the semiconductor trade.

Energy was the second-best performing S&P 500 sector, rising 1.1%, as oil prices extended gains on escalating Middle East tensions. West Texas Intermediate crude climbed 2.6% to $85.35 a barrel, its highest level since June 12, after U.S. forces launched a 10th straight day of strikes on Iranian infrastructure. Brent crude rose 2.5% to $91.50 a barrel. The 10-year U.S. Treasury yield edged up three basis points to 4.63%, while the U.S. dollar index ticked higher to 101.04. Gold futures gained 1.3% to $4,065 an ounce.

In corporate earnings, 3M surged 10% to lead the Dow after the conglomerate posted better-than-expected second-quarter results and raised its full-year adjusted earnings forecast to $8.80 to $8.95 per share, up from $8.50 to $8.70. Danaher sank 12% after the life sciences firm issued cautious revenue guidance, projecting core revenue growth of 2% to 3% in the third quarter, below the 5.4% analysts had expected. Hasbro gained 10% following its quarterly report, while General Motors rose 3.5%.

Crypto-tied stocks rallied alongside Bitcoin, which traded around $66,600, up from overnight lows near $65,000. Coinbase Global soared 11% and Robinhood Markets gained 8%, while Strategy and MARA Holdings rose 6% and 4.5%, respectively.

This article is for informational purposes only and does not constitute investment advice.