Wall Street shook off last week’s slump and charged higher Monday, powered by a run in the biggest beneficiaries of artificial intelligence spending. The Dow added roughly 600 points while the S&P 500 rose about 1.6% and the Nasdaq climbed more than 2%, recouping a chunk of Friday’s losses. Gains were broad, but semiconductors did the heavy lifting.
Chip euphoria centered on Broadcom after the company unveiled a multiyear collaboration with OpenAI to build and deploy custom AI accelerators and networking gear.
Shares rose as much as 9% on the headlines, putting the stock among the S&P 500’s top performers for the session.
The deal envisions rolling out hardware starting in 2026 and scaling through the end of the decade, reinforcing expectations that AI infrastructure is still in the early innings of an investment cycle measured in the hundreds of billions.
The renewed appetite for risk followed a bruising stretch for equities tied to trade tensions and worries about growth.
Comments from Washington that appeared to soften rhetoric on China trade helped ease nerves and set the stage for a relief rally. From there, chips took over.
Nvidia, which has ridden the first wave of AI spending, added about 2% to 3% intraday. AMD advanced alongside it, and the PHLX Semiconductor Index jumped nearly 5% as investors rotated back into AI hardware suppliers.
Under the surface, the session’s advance leaned on a simple narrative that remains intact: hyperscalers and leading AI developers are still scrambling to secure compute, networking and memory.
Recent disclosures and guidance from suppliers underscore that backdrop. Taiwan Semiconductor Manufacturing Co. is expected to report a near 30% year-over-year jump in third-quarter profit this week, propelled by high-performance AI chips, after already flagging a similar surge in revenue.
That update will offer another read on whether supply is catching demand into year-end.
In pockets of the market that sold off hardest late last week, Monday’s tone flipped decisively.
Mega-cap tech and money-center banks helped lead the Dow higher, with Nvidia and JPMorgan among the largest point contributors early in the day.
Easing bond yields added support, giving duration-sensitive growth stocks more room to run.
One near-term test comes Thursday, when TSMC reports results and offers fresh capital-spending and capacity commentary.
Investors will parse any early read-through on the cadence for next-generation accelerators and advanced packaging, which has been a constraint across the ecosystem.
The company’s outlook could influence how much of today’s AI enthusiasm translates into fourth-quarter orders versus 2026 and beyond.
Market technicians will also note that the surge follows an early-October run that put the Nasdaq within striking distance of prior highs before last week’s air pocket. If momentum holds, traders will look for confirmation that breadth is improving, not just a narrow tech-led rebound.
Earlier this fall, the Nasdaq hit a record, and the debate turned to whether bulls could defend that level on the next drawdown. Nasdaq hits new all-time high.
Broadcom’s OpenAI pact adds another plank to a multiyear story that includes custom accelerators, high-speed networking and optics.
Nvidia’s data center franchise remains central to model training and inference at scale. AMD is pressing its advantage in price-performance and availability. And upstream, foundry and packaging capacity is racing to keep up.
If Thursday’s numbers from TSMC validate that picture, the chip trade may retain leadership into earnings season.
Investors with a shorter horizon will watch whether breadth improves in the next few sessions and whether bond yields stay contained.
If those pieces hold, Monday’s move looks less like a reflex bounce and more like a handoff back to the AI-spending theme that has steered 2025.
For a read on how that theme has threaded through recent macro squalls, revisit our coverage of Nvidia and CoreWeave keep AI momentum.