Dow tops 53,000 for first time as AI chip stocks lead Wall Street higher

US stocks closed higher across the board Monday as bargain hunters piled into AI semiconductor shares, lifting major indexes after a recent pullback in the chip sector. Investors were also positioning ahead of earnings reports from major technology companies and the release of minutes from the Federal Open Market Committee.

The Dow Jones Industrial Average rose 155.84 points, or 0.29 percent, to close at 53,055.91, crossing the 53,000 mark for the first time.

The S&P 500 gained 54.19 points, or 0.72 percent, to 7,537.43, while the tech-heavy Nasdaq Composite climbed 288.49 points, or 1.12 percent, to 26,121.16.

Wall Street had been closed Friday for the Independence Day holiday and returned Monday with buyers concentrated in AI chip stocks, driving a broad rebound.

The S&P 500 information technology sector outperformed, and the Philadelphia Semiconductor Index snapped a two-day losing streak to finish up 2.2 percent.

Among individual stocks, Broadcom rose about 3.7 percent after news that it had extended its supply agreement with Apple through 2031. AMD surged 6.6 percent after Goldman Sachs raised its price target on the stock, and semiconductor equipment maker Teradyne advanced 2.8 percent.

Nvidia edged up 0.4 percent after issuing a statement that its roadmap was on track, pushing back against reports that the launch of its next-generation AI servers could be delayed by more than a year due to manufacturing issues.

Optimism surrounding Korean chipmakers also supported sentiment. Investors continued to watch Samsung Electronics, which is set to report quarterly earnings this week, and SK hynix, which is preparing to list American depositary receipts on the Nasdaq.

Earnings season is set to kick off in earnest this week, with major US companies including Delta Air Lines and PepsiCo scheduled to report results.

Economic data also provided a tailwind for markets.

The Institute for Supply Management's services purchasing managers index for June came in at 54.0, in line with market expectations. The reading slipped 0.5 points from the prior month but remained above the 50 threshold separating expansion from contraction, extending services-sector growth to 24 consecutive months.

With last week's jobs data coming in below expectations and the services index landing within the anticipated range, expectations grew that the Federal Reserve may face less pressure to raise interest rates this year. Markets are now focused on the minutes from the FOMC's June meeting, due Wednesday.

Ed Yardeni, president of Yardeni Research, said the market is being driven not by simple FOMO — fear of missing out — but by what he called "FEMA," or Fabulous Earnings Momentum, reflecting strong underlying profit growth.

Analysts say corporate earnings are increasingly likely to determine the market's direction in the near term, outweighing interest rate and macroeconomic variables. If chipmakers that stand to benefit directly from expanding AI investment continue to beat earnings expectations, buying interest could spread back across the broader technology sector, which has recently undergone a correction.