U.S. stock indexes presented a mixed picture on Monday, with the S&P 500 Index ($SPX) and the Nasdaq 100 Index ($IUXX) recovering ground lost on Friday, largely propelled by renewed enthusiasm for artificial intelligence which significantly boosted chipmakers and related infrastructure companies. The S&P 500 closed up 0.30%, while the Nasdaq 100 saw a more substantial gain of 1.58%. In contrast, the Dow Jones Industrial Average ($DOWI) registered a modest decline of 0.16%.
June E-mini S&P futures (ESM26) edged higher by 0.18%, and June E-mini Nasdaq futures (NQM26) climbed 1.44%, indicating a positive sentiment carrying into subsequent trading sessions.
Chipmakers Lead the Charge
The semiconductor sector was a standout performer, with several key players experiencing significant gains. Intel (INTC) closed up over 11%, spearheading advances in both the S&P 500 and Nasdaq 100. This surge followed a report by The Information indicating that Google has placed an order with Intel for three million Tensor Processing Units, slated for manufacturing in 2028. Other notable gainers in the chip and AI infrastructure space included KLA Corp (KLAC), which rose more than 9%, and Micron Technology (MU) and Applied Materials (AMAT), both up over 8%. ASML Holding NV (ASML) and Lam Research (LRCX) also saw gains exceeding 6%, with Sandisk (SNDK) and Advanced Micro Devices (AMD) closing up more than 4%. Further down the list, ON Semiconductor (ON), Seagate Technology Holdings Plc (STX), and Microchip Technology (MCHP) advanced more than 3%, while Western Digital (WDC), Broadcom (AVGO), and Texas Instruments (TXN) each gained over 2%.
Geopolitical Tensions Ease, Oil Prices Stabilize
The market also found support as crude oil prices, which had initially jumped more than 4% on Monday due to escalating hostilities between Iran and Israel, gave back most of their gains. Reports indicated that Iran signaled an end to its current military operations against Israel, and President Trump commented that both sides were seeking an immediate ceasefire. This de-escalation helped to temper inflation expectations, with the 10-year breakeven inflation rate falling to a 1.5-month low of 2.452%.
Interest Rate Outlook and Treasury Markets
In the bond market, September 10-year T-notes (ZNU6) closed down 1.5 ticks, pushing the 10-year T-note yield up by 1.8 basis points to 4.548%. The yield reached a two-week high of 4.580% during the session. Treasury yields were pressured by a combination of factors, including the stronger-than-expected U.S. May nonfarm payrolls report and upward revisions to April’s figures, which bolstered speculation of a potential interest rate hike by the Federal Reserve. The market is currently discounting a 3% chance of a 25 basis point rate hike at the next FOMC meeting on June 16-17. Safe-haven demand for Treasuries was also curtailed by the broader stock market’s recovery. Upcoming Treasury auctions, totaling $119 billion in T-notes and T-bonds this week, also contributed to bearish sentiment for T-notes.
Global Markets Mixed
Overseas, stock markets settled mixed. The Euro Stoxx 50 closed unchanged, while China’s Shanghai Composite dropped 1.70%, and Japan’s Nikkei Stock Average fell 3.85%. European government bond yields moved higher, with the 10-year German Bund yield climbing to a two-week high of 3.073% and the 10-year UK gilt yield reaching a two-week high of 4.958%.
Notable Stock Movers
Beyond the chip sector, other stocks saw significant movement. Cerebras Systems (CBRS) jumped over 18% after Wedbush initiated coverage with an ‘outperform’ rating and a $270 price target. Marvell Technology (MRVL) gained more than 9% following its upcoming inclusion in the S&P 500 index. Nurix Therapeutics (NRIX) surged over 6% on news of a potential $2.3 billion deal with Roche for rights to an experimental blood-cancer drug. Cummins Inc (CMI) rose more than 3% after UBS upgraded the stock to ‘buy’. Voya Financial (VOYA) climbed over 2% after Raymond James upgraded the stock to ‘strong buy’.
Conversely, Wix.com (WIX) fell more than 7% due to revised expectations for a $50 million reduction in bookings for 2026. Cien Corp (CIEN) declined over 4% on plans to offer $2 billion in convertible senior notes. Apple (AAPL) closed down more than 1%, reportedly due to a tepid market response to its latest AI platform features.
Cryptocurrency-exposed stocks also rallied, with Bitcoin (^BTCUSD) rising over 2%. Galaxy Digital Holdings (GLXY) led the gains, up more than 20%, followed by MARA Holdings (MARA) up over 11%, and Coinbase Global (COIN) up over 6%.
