'Tech rally not over yet': Nasdaq rises 0.9% as semiconductors surge

Wall Street rebounded Monday, led by technology and semiconductor stocks that had sold off sharply the previous week. Bargain hunters moved into growth stocks that had pulled back on concerns over stretched valuations and fading expectations for interest rate cuts, pushing the Nasdaq composite up nearly 1 percent. The blue-chip Dow Jones Industrial Average, however, edged down to close slightly lower.

The Dow fell 80.77 points, or 0.16 percent, to 50,786.01 on Monday. The S&P 500 rose 21.99 points, or 0.30 percent, to 7,405.73, while the Nasdaq composite gained 220.23 points, or 0.86 percent, to close at 25,929.66.

Technology and semiconductor shares drove the day's gains. The Philadelphia Semiconductor Index surged more than 5.8 percent, recovering a significant portion of the previous session's losses. The index had dropped sharply last week on overvaluation concerns and stronger-than-expected jobs data that pushed back expectations for a rate cut this year.

Among individual stocks, Micron rebounded 9.9 percent after tumbling more than 13 percent the prior session. Intel surged on reports that Google may tap the company to produce next-generation AI tensor processing units.

Marvell Technology also posted strong gains, rising more than 9.6 percent. The advance was fueled by news of its inclusion in the S&P 500, along with the lingering effect of Nvidia CEO Jensen Huang naming it a candidate to become "the next trillion-dollar company."

Apple, by contrast, weakened. The company unveiled an AI-enhanced version of its Siri voice assistant at its annual Worldwide Developers Conference, but the market judged the announcements as falling short of investor expectations.

Easing tensions in the Middle East also helped lift investor sentiment. News that Israel and Iran, which had exchanged fire over the weekend, agreed to halt further attacks revived appetite for risk assets. International oil prices had spiked more than 5 percent intraday on the back of the armed conflict, but pared gains after the ceasefire announcement.

Brent crude futures for August delivery settled up 1.25 percent at $94.25 a barrel, while West Texas Intermediate for July delivery rose 0.84 percent to $91.30 a barrel.

US Treasury yields rose, with the 10-year note climbing 3 basis points to 4.56 percent. Spot gold prices were little changed, while virtual assets strengthened — bitcoin gained more than 2 percent to reclaim the $63,000 level.

Some on Wall Street view the recent pullback in technology stocks as a temporary pause. Morgan Stanley Chief Investment Officer Mike Wilson described the correction as a "healthy reset," arguing that strong corporate earnings growth and solid economic conditions make it likely the bull market will continue.

Citigroup raised its year-end S&P 500 target to 8,100 from 7,700, citing an improved earnings outlook.

Attention is now turning to the May consumer price index report due this week. A stronger-than-expected reading could once again dampen hopes for a rate cut this year. The pipeline of major initial public offerings — including SpaceX — is also seen as a potential variable for investor sentiment.