Philadelphia Semiconductor Index surges 3% to 12,025 as dip buyers return

The Philadelphia Semiconductor Index surged 3% to 12,024.67 on Monday, its biggest single-day gain in three weeks, as investors snapped up chip stocks following last week's bear-market decline.

The Philadelphia Semiconductor Index surged 3% to 12,024.67 on Monday, its biggest single-day gain in three weeks, as dip buyers returned after the index entered a bear market.

"Last week's selloff was brutal enough that even good news from TSMC could not stop the bleeding, but the magnitude of the decline created an entry point for investors who had been waiting on the sidelines," said Daniela Hathorn, senior market analyst at Capital.com.

Memory chipmakers led the rebound, with Western Digital, Seagate Technology, Micron Technology and SanDisk all rising between 3.2% and 4.2% in premarket trading. The bounce followed a stretch that saw the SOX close Friday more than 20% below its late-June record high, confirming a bear-market decline. Last week, the Nasdaq Composite lost 2.9%, the S&P 500 fell 1.6% and the Dow slipped 0.9%.

The semiconductor rebound comes at a critical juncture for the broader market, with earnings due this week from Alphabet, Tesla, Intel and IBM that will test whether the AI-driven rally can regain momentum. "If earnings reports in the coming weeks suggest that we remain in the spend phase of the AI buildout, investors are likely to get more impatient, and the selloff could drag on over the summer months," said Kathleen Brooks, research director at XTB.

The rally in chip stocks helped lift broader equity futures. Nasdaq 100 futures advanced 0.9%, while S&P 500 E-minis rose 29.25 points, or 0.39%, and Dow E-minis gained 133 points, or 0.25%. The move higher came as oil prices pulled back from earlier highs after Iran's Foreign Ministry said diplomatic talks could still be possible, easing immediate concerns over disruptions to shipping through the Strait of Hormuz. Brent crude, which briefly climbed above $90 a barrel, later retreated.

Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, reported a 77% jump in second-quarter profit and raised its capital spending forecast, citing "extremely robust" demand for AI chips. Despite the strong results, TSMC shares fell about 5% in premarket trading as investors showed increasingly demanding expectations for AI-linked companies — a pattern that also played out last week when Dutch chip equipment maker ASML reported strong results only to see its shares decline.

The broader market also drew support from benign inflation data that kept Treasury yield expectations in check. Markets are pricing about a 12% chance of a quarter-point rate increase at the Fed's July meeting and a roughly 53% chance of another hike in September, according to CME's FedWatch tool. U.S. retail sales rose 0.2% in June, with core retail sales — excluding food services, gas stations and autos — advancing 0.5%, suggesting resilient consumer spending.

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