Tech Rally Driven by Chipmakers and AI Stocks Boosts U.S. Indexes

The S&P 500 rose 0.43%, the Dow Jones edged down 0.04%, and the Nasdaq‑100 advanced 1.17% in Thursday trading. September E‑mini futures also posted gains, with the S&P up 0.46% and the Nasdaq up 1.33%.

Equity markets were lifted primarily by strength in chipmakers and AI‑infrastructure companies. Meanwhile, crude oil prices declined as shipments through the Strait of Hormuz increased and OPEC+ announced a modest output boost, easing inflation expectations and pulling the 10‑year Treasury yield down two basis points to 4.46%.

Evidence of a softer labor market—last week’s smaller‑than‑expected nonfarm payrolls report—added to the bullish tone, reducing the likelihood of an imminent Fed rate hike. Outlook for robust second‑quarter earnings further supported equities. Bloomberg Intelligence forecasts a 23% YoY earnings increase for Q2, with AI‑related spending accounting for the bulk of the growth. AI‑infrastructure stocks alone are expected to contribute roughly 60% of the S&P 500’s EPS expansion this quarter.

WTI crude fell 0.5% but remains above the recent 4.25‑month low, as Saudi Arabia and the UAE bring shipments back toward pre‑war levels. OPEC+ agreed to add 188,000 barrels per day to its target, effective August 1, reversing earlier production cuts.

Markets now price a 24% chance of a 25‑basis‑point Fed move at the next FOMC meeting on July 28‑29. Overseas benchmarks slipped, with the Euro Stoxx 50 pulling back 0.47% from a new high, while China’s Shanghai Composite edged down 0.06% and Japan’s Nikkei‑225 was essentially flat.

Interest Rates

September 10‑year Treasury notes gained four ticks, pushing the yield 1.9 bp lower to 4.464%. The decline reflects lower crude prices and the softer payroll data, though upcoming Treasury auctions—$119 bn of notes and bonds this week—cap further gains.

European bond yields were mixed. The German 10‑year bund rose to a two‑week high of 2.94%, while the U.K. gilt slipped 0.4 bp to 4.779%.

Economic releases showed a modest slowdown in Eurozone retail sales (May +0.2% MoM, below the +0.3% forecast), but consumer confidence jumped to a four‑month high (Sentix +10.3 to –3.1). German factory orders beat expectations, rising 1.9% MoM in May.

Swaps markets assign a 3% probability of an ECB rate increase at the July 23 policy meeting.

US Stock Movers

Semiconductor and AI‑infrastructure names led the rally, with the iShares Semiconductor ETF (SOXX) gaining more than 3%. Top gainers include Western Digital (+8%), Seagate (+6%), ARM (+5%), Broadcom (+5%), ON Semiconductor (+5%), AMD (+4%), Qualcomm (+4%), Intel (+3%), and Texas Instruments (+3%). Additional chip‑sector performers rose 2% or more, including ASML, Microchip, Marvell, KLA, Lam Research, and SanDisk.

Cybersecurity stocks also posted strong gains. CrowdStrike (+6%) led the sector, followed by Palo Alto Networks, Okta, and Fortinet, each up over 4%. Zscaler rose more than 3%, and Cloudflare climbed over 2%.

Software names lagged, with Workday down over 3%, Intuit slipping more than 2%, and Microsoft, Adobe, Autodesk, and Salesforce each off at least 1%.

SpaceX (SPCX) advanced more than 3% after Haitong International initiated coverage with an outperform rating and a $191 price target.

Bank stock US Bancorp rose more than 2% following a Jeffries upgrade to buy and a $75 price target. Murphy USA gained over 1% after Goldman Sachs upgraded the retailer to neutral from sell. ZIM Integrated Shipping fell more than 7% after Israeli Prime Minister Netanyahu indicated a proposed sale was “not on the agenda.” Brown & Brown declined over 1% after Morgan Stanley downgraded the insurer to underweight.

Earnings Reports (7/6/2026)

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