On Monday, falling oil prices and a rebound in tech stocks after last week's fluctuations drove up U.S. stocks.
The Dow Jones Industrial Average closed up 1,104.02 points, an increase of 2.15%, at 52,389.75 points, supported by gains in stocks such as Goldman Sachs and Caterpillar. The Nasdaq Composite Index closed up 673.71 points, an increase of 2.74%, at 25,253.14 points. The S&P 500 Index closed up 173.08 points, an increase of 2.35%, at 7,549.94 points.
After rising on Monday, the Dow Jones is now above its closing level on the midterm election day. However, the S&P 500 index and the Nasdaq, which is dominated by tech stocks, are still slightly below that level.
The decline in oil prices on Monday boosted investor sentiment. Futures for West Texas Intermediate crude oil in the United States fell by 4.38%, with a settlement price of $86.85 per barrel. International benchmark Brent crude oil dropped by 5.85% to $92.57 per barrel.
Last Friday, the market partially rebounded from the brutal sell-off driven by artificial intelligence on Thursday, with chip stocks picking up as buying interest returned. However, the strong performance of Democrats in the midterms continues to worry the market, as investors fear that stricter regulations on data center construction, energy usage, and development costs could slow down the boom in artificial intelligence infrastructure.
The tech sector also paid attention to a bombshell on Sunday: NVIDIA's board of directors is investigating the relationship between co-founder and CEO Jensen Huang and a female businessman. NVIDIA's stock price has recently dropped by 5%.
Apart from NVIDIA, the stocks of the "Big Seven" companies rose. Amazon increased by 3%, while Tesla and Alphabet rose by 6% and 1% respectively. Microsoft also saw a 3% increase.
Other chip stocks also saw gains, with Broadcom rising by 9%, and Super Microelectronics (AMD) soaring by 13%. iShares Semiconductors ETF (SOXX), which fell by about 13% last week, rose by more than 7%.
Infrastructure Capital Advisors CEO Jay Hartfield stated that the recent sell-off in chip stocks has been "excessive." He added that this round of turmoil is still "partially justified" because "in the short term, the Democrats have indeed brought about policy clouds, but more importantly, this will also be the case in the long term starting from 2028." However, he believes that data centers will ultimately "be built in the United States."
Regarding the broader market, Hartfield stated that Monday's rebound does not mean that "the alarm has been lifted." In fact, he expects the S&P 500 index to fluctuate within a certain range until the end of the year.
The CEO said, "There are still many unresolved factors in the market," and pointed out that the conflict in the Middle East has led to high oil prices, as well as the prospects for Federal Reserve interest rates.
This week, investors will be paying attention to key artificial intelligence-related financial reports – CoreWeave, Cisco, and Applied Materials will all release their earnings – to assess the prospects of the tech industry and whether there is further room for continuation in the recent sell-offs.
They will also pay attention to the Consumer Price Index released on Tuesday and the Producer Price Index released on Friday in order to look for clues about the next steps of the Federal Reserve.
