Chip Stocks Recover Monday as Alphabet, Tesla, Intel Earnings Loom

TLDR

The Nasdaq and S&P 500 rose Monday while the Dow fell slightly, recovering some losses from last week Chip stocks led gains as investors waited for Big Tech earnings from Alphabet, Tesla, and Intel Wall Street is watching for signs that companies are turning AI investments into real revenue Oil prices pulled back after rising on US-Iran tensions, with Iran signaling diplomacy could continue Analysts say the tech selloff reflects a broader market rotation away from former leaders

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US stocks opened Monday’s session mixed, with the Nasdaq and S&P 500 moving higher while the Dow Jones Industrial Average slipped. It was an early attempt to recover from a losing week for all three major indexes.

The Nasdaq gained 0.6%, the S&P 500 added around 0.3%, and the Dow fell roughly 0.2%, or about 92 points, after reversing earlier gains.

E-Mini S&P 500 Sep 26 (ES=F)

Last week’s losses were led by chip stocks, which had been among the best performers in the market year-to-date. Those same stocks were among the early movers higher on Monday.

Big Tech Earnings in Focus

The main event this week is earnings. Alphabet, Tesla, and Intel are all set to report, and investors are watching closely.

Wall Street has raised expectations for these results. The focus is on whether these companies can show that their heavy spending on artificial intelligence is starting to generate real returns.

Darrell Cronk, Chief Investment Officer at Wells Fargo Investment Institute, described the current environment as a “healthy reality check” for the semiconductor and AI trade. He said a short-term rebound from oversold conditions would not be surprising but noted the intermediate-term uptrend has been disrupted.

Morgan Stanley’s Chief Investment Officer Mike Wilson said the firm’s “broadening thesis continues to play out” as former market leaders pull back and other parts of the market take their turn.

IBM is also reporting earnings this week, adding to what is expected to be a busy few days for investors in the tech sector.

Oil Pulls Back Despite Middle East Tensions

Oil prices rose briefly on Monday before giving back gains. The move came after a weekend of escalating conflict between the US and Iran.

The US carried out its ninth consecutive day of attacks, and Iran responded by striking US allies in the region, including Kuwait.

Iran later signaled that diplomatic exchanges with the US would continue through mediators. That helped ease some of the pressure on oil prices.

Brent crude futures remain well below their peaks from April and May, suggesting energy markets may be adjusting to the conflict by looking for alternative shipping routes rather than pricing in a prolonged disruption through the Strait of Hormuz.

A ceasefire agreement between the two sides still appears far off, with both parties said to be far apart on terms.

Treasury yields edged up during the session, while Bitcoin prices moved lower.

The market is now watching earnings results to see if Big Tech can provide the next catalyst for the broader artificial intelligence investment theme, following weeks of sector rotation and volatility in the chip space.

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