Semiconductor Rebound Lifts Nasdaq, but Narrow Market Participation Limits Gains

Stocks began the week with a mixed performance as a strong rebound in semiconductor shares helped lift the Nasdaq Composite 0.9% and the S&P 500 0.3%, while the Dow Jones Industrial Average slipped 0.2%. Despite the positive finish for two of the three major averages, the market lost momentum throughout the session, with participation narrowing significantly as the day progressed.

Technology stocks once again drove the action. The information technology sector gained 1.5%, although it surrendered nearly half of its intraday advance by the close. Semiconductor shares led the recovery effort after Friday’s sharp selloff, pushing the Philadelphia Semiconductor Index 5.6% higher.

Investors eagerly bought into the recent weakness across the chip sector, encouraged in part by comments from NVIDIA CEO Jensen Huang, who suggested over the weekend that the pullback represented a buying opportunity. The rebound was broad-based, with many semiconductor names posting strong gains.

Intel emerged as the top-performing stock in the S&P 500, surging more than 11% after reports indicated that both Alphabet and NVIDIA are evaluating the company as a potential backup chip supplier. Corning also posted a strong gain after announcing a multibillion-dollar data center infrastructure agreement with Amazon, reinforcing enthusiasm surrounding AI-related infrastructure spending.

Outside the S&P 500, AI-linked names continued to attract significant investor interest. Cerebras Systems jumped after its quiet-period expiration triggered a wave of bullish analyst initiations, while Marvell rallied after news that it will join the S&P 500 later this month.

Not all technology names participated in the advance. Apple reversed an early gain of roughly 3% and finished lower after investors reacted cautiously to announcements made during its Worldwide Developers Conference, including new AI-powered Siri capabilities and other artificial intelligence features.

While semiconductor strength provided a notable tailwind, participation across the broader market steadily weakened. By the closing bell, only three S&P 500 sectors managed to finish in positive territory.

The energy sector gained 1.1%, supported by a modest increase in crude oil prices. WTI crude settled up 0.8% at $91.26 per barrel. Oil prices retreated significantly from overnight highs after reports that Israel and Iran had agreed to pause their recent exchange of strikes, helping ease some geopolitical concerns.

Consumer discretionary stocks also finished higher, rising 0.5%. Tesla led the sector with a strong rebound of more than 4%, recovering a portion of Friday’s losses and helping offset weakness elsewhere within the group.

On the downside, communication services fell 1.1% as Alphabet and Meta Platforms continued to face pressure. Alphabet remains under scrutiny following last week’s announcement of its large equity offering to fund expanded AI infrastructure investments, while Meta posted a comparable decline.

Defensive sectors that outperformed during Friday’s market selloff moved sharply lower. Utilities fell 1.9%, real estate dropped 1.6%, and materials lost 1.3%, weighed down by weakness among construction-materials companies.

Smaller-cap stocks outperformed the major averages but also faded from their strongest levels of the day. The Russell 2000 gained 0.8%, while the S&P MidCap 400 added 0.2%.

Overall, the session was somewhat disappointing beneath the surface. A powerful rebound in semiconductor stocks was only enough to produce modest gains for the broader indices, while many large-cap stocks outside the semiconductor space continued to struggle. Market participants now turn their attention to several important catalysts later this week, including key inflation reports, Oracle’s earnings release, and the highly anticipated SpaceX IPO, all of which could play a significant role in determining whether the market can maintain its push near record highs.

Our FTinvest 11 model portfolio declined 1.60% to close at 997.82, falling back below the 1,000 level for the first time since mid-April. The portfolio has now recorded four consecutive losing sessions, extending the pullback from its all-time high of 1,078.93 reached in late May. Recent market action has weighed on performance, with the portfolio giving back a meaningful portion of its spring gains.

FTinvest 11 remains up approximately +7.50% year-to-date, continuing to hold a respectable gain despite the recent weakness. The portfolio is now approximately 7.5% below its all-time high, reflecting a significant retracement but remaining short of correction territory. While short-term momentum has clearly deteriorated, FTinvest 11’s disciplined, value-driven investment approach remains focused on long-term capital appreciation rather than day-to-day market fluctuations.