Dow rises 140 points as chip stocks rebound ahead of Big Tech earnings

• Memory chipmakers led the rebound with Western Digital and Seagate rising 4-6%, while the VanEck Semiconductor ETF (SMH) climbed 2.6% after falling nearly 9% the previous week.
• Markets are pricing in only a 12% probability of a Fed rate hike in July but a 53% chance of an increase in September, following encouraging inflation data released last week.
• Oil prices fluctuated as US-Iran tensions continued with nine consecutive days of strikes, though diplomatic hopes emerged; Brent crude briefly topped $90 per barrel before settling above $88.

Market Summary: Dow Rises on Chip Stock Rebound

Market Performance:

US stocks opened higher Monday with the Dow Jones up 143 points (+0.28%), S&P 500 advancing 0.56%, and Nasdaq gaining 0.87%. This follows a challenging previous week where the S&P 500 fell 1.6%, Nasdaq dropped 2.9%, and Dow declined 0.9%.

Semiconductor Sector Recovery:

Chip stocks led the rebound after significant selling pressure. The VanEck Semiconductor ETF (SMH) climbed 2.6% following a nearly 9% decline the prior week. Memory chipmakers showed strongest gains: Western Digital and Seagate rose 4-6%, AMD gained 4.3%, while Astera Labs and Teradyne advanced over 5%. The Philadelphia Semiconductor Index had entered bear market territory Friday, falling 20% from late-June highs, though remains up approximately 57% year-to-date.

Upcoming Catalysts:

Major tech earnings dominate the week ahead, with Alphabet, Tesla, Intel, and IBM scheduled to report. Intel and Texas Instruments results will be closely watched for semiconductor sector momentum indicators. Analysts project S&P 500 Q2 earnings growth of 26% year-over-year, up from prior 23.7% estimates.

Monetary Policy & Geopolitics:

Markets price in 12% probability of a Fed rate hike in July and 53% chance in September. Recent encouraging inflation data has eased immediate tightening concerns. US-Iran tensions continue, with nine consecutive days of strikes, though diplomatic hopes improved. Oil volatility persisted with Brent crude briefly exceeding $90/barrel before settling above $88, and WTI trading above $82.

Market Outlook:

The semiconductor rebound reflects renewed confidence in AI-driven demand, though stretched valuations remain a concern heading into critical earnings announcements.