Key Takeaways:
- Semiconductor ETF surged 4%, leading all US sector ETFs on Tuesday
- S&P 500 Telecom sector fell 2.6% as Trade Desk and Alphabet slumped
- S&P 500 rose 0.1% to 7,609.78, extending its record run
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S&P 500 hits record as semiconductor ETF surges 4%, telecom lags
The S&P 500 rose 0.1% to a fresh record of 7,609.78 as a semiconductor-led rally in technology stocks offset a sharp decline in telecom shares.
The semiconductor ETF (SOXX) closed up 4.01%, the strongest performance among US sector ETFs, after Nvidia's chief executive suggested Marvell Technology could become the next company to reach a $1 trillion valuation, sending Marvell shares to their biggest gain on record. Utilities, materials and industrials each rose as much as 1.93%, while the technology sector added 0.92%.
On the downside, the S&P 500 telecom sector slumped 2.61%, the worst performer among the 11 GICS groups. Trade Desk tumbled 9.11% and Alphabet fell 3.87% for its Class A shares and 3.83% for Class C, weighing on the sector. The biotech ETF dropped 3.01%, while the network index ETF and global airline ETF declined 1.35% and 1.49%, respectively.
The divergence between semiconductor strength and telecom weakness highlights a rotation within growth sectors as investors reassess AI beneficiaries. Alphabet's $80 billion capital raise to fund AI investments weighed on its shares, while chip names continued to draw demand on expectations of sustained AI infrastructure spending.
The Dow Jones Industrial Average added 228.91 points, or 0.4%, to 51,307.79, while the Nasdaq composite rose less than 0.1% to 27,093.90. The Russell 2000 index of smaller companies outperformed, climbing 0.9% to 2,931.96. Oil prices rose during the session.
For the year, the S&P 500 has gained 11.2%, the Nasdaq has surged 16.6% and the Russell 2000 has advanced 18.1%. The Dow is up 6.8% year to date.
This article is for informational purposes only and does not constitute investment advice.
