:max_bytes(150000):strip_icc()/GettyImages-2247843142-ea0aa6d37f414a699aefe423fe7fac36.jpg "Big Tech Stocks Power Markets Higher Monday. Is the AI Trade Making a Comeback?")
:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2247843142-ea0aa6d37f414a699aefe423fe7fac36.jpg)
Key Takeaways
- The tech sector helped drive Monday’s rally, in what could point to improving sentiment after a recent pullback.
- Markets also got a boost from growing optimism about a potential rate cut by the Federal Reserve next month.
Are investors ready to buy back into the AI trade?
Monday’s market rally, bolstered by a number of AI investor favorites, could point to improving sentiment surrounding the sector, along with growing optimism about a rate cut by the Federal Reserve next month.
After a particularly tough stretch for tech stocks in recent weeks, the sector was one of the strongest in the S&P 500 Monday, with a number of Magnificent Seven members among its biggest gainers.
Shares of Tesla (TSLA), which has increasingly shifted more of its focus on AI, soared nearly 7% to post one of the top performances in the benchmark index after CEO Elon Musk posted over the weekend that the company plans to grow its AI chips business and “build chips at higher volumes ultimately than all other AI chips combined.”
Shares of Google parent Alphabet (GOOGL) also surged over 6% to a closing record, extending recent gains as it won praise from some in Silicon Valley like Salesforce (CRM) CEO Marc Benioff for its newest AI model Gemini 3.
Why This Matters for Investors
Monday’s big gains could be taken a sign that investors are buying the recent dip in tech stocks. Many of the biggest names in tech are also among the most valuable companies in the world, and have an outsized impact on Americans’ investment portfolios and retirement funds.
AI chipmaker Broadcom (AVGO) led the S&P 500 higher Monday, with its shares surging 11%. Other chip firms including Micron (MU) and Advanced Micro Devices (AMD) also gained, with the Philadelphia Semiconductor Index up close to 5%.
Nvidia (NVDA) shares climbed about 2% after Commerce Secretary Howard Lutnick said the Trump administration is considering granting the company more licenses to sell its advanced chips to companies in China.
