U.S. stocks on Monday ended higher, as a rebound in the tech sector continued after bruising AI-inspired losses last week. That rally lifted the blue-chip Dow Jones Industrial Average above the 50,000 points level for the first time ever.
Investors were looking ahead to a busy week that includes the release of the delayed U.S. jobs and inflation data as well as more corporate earnings.
The Dow seesawed through the day but largely held above the 50,000 mark, ending little changed at 50,135.87 points. The benchmark S&P 500 rose 0.4% to close at 6,961.23 points, and the tech-heavy NASDAQ Composite gained 0.9% to settle at 23,238.67 points.
Get exclusive Wall Street analysis, real-time updates with InvestingPro The main averages on Wall Street had surged on Friday, staging a comeback after the tech rout. The advance saw the Dow achieve its historic milestone, while the S&P Nasdaq climbed about 2% each.
“The sell-off from Tuesday to Thursday flushed out a number of short-term longs, while the rebound on Friday forced many of the shorts added during that period to cover. That left both long and short short-term participants needing to recalibrate positions," Peter Corey, chief market strategist at Pave Finance, told Investing.com.
“Friday’s move was also supported by volatility-targeting strategies. These funds reduced gross exposure when the VIX rose earlier in the week, then added it back as volatility measures collapsed. With the VIX still sitting within Friday’s range, additional buying from these major market players is likely to be more muted from here. Assuming the VIX continues to fall, expect higher stock prices as these funds add to Friday’s purchases,” Corey added.
Earnings continue to flow The rebound late last week was driven largely by gains in chipmakers and AI-related stocks, which had borne the brunt of heavy selling amid worries over technology disruption and stretched valuations.
The tech sector had seen sharp selloffs earlier in the week, with investors rotating out of high-growth names amid concerns that rapid advances in AI could disrupt software business models and pressure profit margins.
Investors will be able to study more corporate earnings this week, with the likes of consumer giant Coca-Cola Co (NYSE:KO) and automaker Ford Motor Company (NYSE:F) slated to report quarterly results.
As far as Monday is concerned, chipmaker ON Semiconductor (NASDAQ:ON) will be one of the highlights of the slate of quarterly corporate reports.
The company previously delivered an outlook for its fourth-quarter revenue and profit that was broadly in line with expectations. Strength at its business helping manage power consumption at AI data centers has partially offset tepid electric vehicle demand in North America and Europe, which has dented automotive industry spending on its silicon carbide chips.
Fellow tech names like Datadog (NASDAQ:DDOG), Spotify (NYSE:SPOT), Cisco (NASDAQ:CSCO), and Applied Materials (NASDAQ:AMAT) are also due to be released this week.
Key jobs, CPI data awaited Away from the corporate sector, investors will also this week get to digest key U.S. economic data releases that were delayed by a short-lived government shutdown.
