Tech stocks rebound as AI confidence returns

Growth stocks rebounded on Monday, with the Nasdaq Composite climbing 1.67% to 26,576 and the S&P 500 rising 0.85% to 7,725 as of 11:34 AM ET. The Dow Jones Industrial Average traded 0.15% higher at 52,094. This recovery marks a return from the worst week for growth stocks since June, driven by renewed investor engagement with artificial intelligence firms.

Sector performance diverged sharply, with consumer cyclicals and technology leading the gains while real estate and consumer defensives recorded the biggest losses. Sandisk soared 7.4% and Micron Technology gained 4.7% as a shift in memory sentiment boosted the shares, supporting a broader recovery in semiconductor stocks. Intel also climbed following a JPMorgan upgrade.

Amazon.com pushed higher on cloud optimism, aided by Morgan Stanley, which raised its price target on the stock and named it a top pick. In contrast, NRG Energy declined as utility stocks broadly underperformed the market. The chip sector rebounded as last week's jitters faded; CoreWeave finished in the green despite earlier concerns about its debt yields that had triggered part of the previous sell-off.

Macro factors applied pressure to other parts of the market. Gold fell 0.51% to $4,145.56, while the 10-Year Treasury yield gained 3 basis points to 5.13%. Real estate stocks came under additional pressure as U.S. homebuilder confidence fell to a 14-year low.

Global uncertainty lingered in the backdrop, with violent protests in France and Italy pressuring European equities and oil prices remaining elevated. Investors are watching this week's earnings from Meta Platforms, Space Exploration Technologies, and Tesla for signs of strength or weakness in the AI and tech sector. While last week's rout may have passed, nerves remain, and market participants want to see strong demand and clear paths to deliver returns on Capex spending.