US stocks opened sharply higher Monday as dip buyers rotated back into technology shares, reversing a portion of Friday's 4% Nasdaq rout that ended the S&P 500's nine-week winning streak.
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Nasdaq rebounds 1.2% as tech buyers step in after 4% rout
The Nasdaq Composite jumped 1.2% at the opening bell, recovering from Friday's 4.2% plunge that erased more than $1 trillion in market value from the technology sector.
"We are at the beginning of it, and whatever happened to the stock market, you should be very happy because now you can buy at a discount," Jensen Huang, chief executive officer of Nvidia, said Monday in Seoul, where he announced a multi-year agreement with SK Hynix to design future generations of AI memory chips.
The S&P 500 rose 0.9%, while the Dow Jones Industrial Average added 0.7%. Chip stocks led the rebound, with Micron Technology surging 9% and Nvidia gaining 2%. Marvell Technology jumped nearly 9% after S&P Dow Jones Indices said the custom-chip provider would join the S&P 500, replacing Campbell's. The advance followed a brutal session Friday that saw the S&P 500 sink 2.6% to 7,383.74, its worst day since October, and the Nasdaq lose 4.2% to 25,709.43. Nvidia fell 6.2%, Broadcom dropped 7.9%, and Micron slid 13.3% in that session. Meta Platforms declined 5.5% after a published report said the social media giant may seek a new stock offering to fund AI infrastructure spending.
The rebound will be tested this week by three catalysts: Wednesday's Consumer Price Index report, Oracle's earnings after the bell Wednesday, and the likely SpaceX IPO on Friday — expected to be the largest public offering on record. The Fed's June 16-17 policy meeting, the first under Chair Kevin Warsh, looms with markets pricing in a more than 60% chance of a rate hike by year-end after May payrolls added 172,000 jobs, according to CME FedWatch data.
Oil Spikes as Iran-Israel Ceasefire Frays
Oil prices climbed after Iran fired missiles at Israel for the first time since April and Israel struck back, threatening a fragile ceasefire. Brent crude rose as much as 4% to almost $98 a barrel before paring gains to trade near $94, while West Texas Intermediate hovered around $92. The flare-up revived concerns that a US-brokered truce could collapse, reopening open conflict in the Middle East and keeping the Strait of Hormuz — through which about a fifth of global oil passes — in the crosshairs. President Trump urged both sides to stop shooting, saying peace talks "should move quickly," even as the two sides remain far apart on key wedge issues.
Bond Yields Rise as Rate-Hike Bets Firm
The yield on the 10-year Treasury rose to 4.54% from 4.50% before Friday's jobs report, while the 2-year yield jumped 12 basis points to 4.16%, its biggest one-day gain in more than a year. Higher rates pose a particular risk to AI stocks trading at 35 to 50 times forward earnings, where future profit streams become less valuable as discount rates rise. "Any hopes of a Fed rate cut have effectively been eliminated with this morning's strong jobs report," Ronald Temple, chief market strategist at Lazard, said Friday. The International Monetary Fund's Kristalina Georgieva said the world economy needs to build resilience to a new reality of rolling global shocks, pointing to the development of AI as a key risk.
This article is for informational purposes only and does not constitute investment advice.
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