Nasdaq and S&P 500 rebound as AI stocks recover ahead of corporate earnings

Wall Street staged a decisive turnaround as the tech-heavy Nasdaq Composite led Wall Street gains, snapping a sharp selloff that had battered artificial intelligence-linked equities and driven semiconductor indexes into historic downward streaks, according to Reuters reporting published by the Rock Hill Herald.

The broader market recovery arrived after a difficult stretch for growth shares, which suffered steep weekly declines due to investor unease over how heavily indebted infrastructure providers and hyperscalers would finance expensive artificial intelligence developments. According to the Rock Hill Herald, the Philadelphia Semiconductor Index had previously snapped an eight-day losing streak after tumbling roughly 15.7% in its longest decline since October 2008. Yahoo Finance UK noted that the Nasdaq fell 4.5% over the same period, ending a four-week winning streak, while the S&P 500 lost nearly 2%, its steepest weekly decline since late June.

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Market participants pointed to oversold conditions as a primary catalyst for the bounce. Michael James, managing director and equity sales trader at Rosenblatt Securities in Los Angeles, told the Rock Hill Herald:

"Rubber bands can only stretch so far in one direction before they snap and start reversing, and you finally saw that enough-is-enough moment in the semiconductors after Friday's close. Nothing changed between Friday's close and this morning's open, other than nothing bad happened over the weekend, and sentiment had gotten so negative that we were oversold to the point where a bounce was due."

Michael James, Managing Director and Equity Sales Trader, Rosenblatt Securities, via Rock Hill Herald

Despite the relief rally, James cautioned that the market faces a packed corporate earnings calendar ahead. Companies including Meta Platforms and Tesla are scheduled to report earnings in coming days and weeks, offering investors fresh visibility into business momentum and technology spending according to the Rock Hill Herald.

The recovery extended across several high-profile names in the semiconductor and cloud sectors. Yahoo Finance reported that retail traders remained active in names such as Micron, SanDisk, CoreWeave, and IREN Ltd., which all climbed following a brutal week. CoreWeave had previously found itself at the center of investor worries surrounding a substantial debt load, with its shares plunging over 25% during the prior week's rout. Meanwhile, International Business Times Australia noted that Advanced Micro Devices climbed nearly 4% as chipmakers rebounded from what was described as their worst week since March.

Macroeconomic tailwinds also supported the risk-on shift. The Sunday Guardian reported that U.S. Equities surged following reports of a tentative agreement aimed at ending conflict and reopening key oil trade routes, alongside policy moves in other energy sectors that helped push crude prices lower. Lower oil prices and declining Treasury yields helped soothe inflation fears that had previously pressured growth and technology valuations.

As trading desks balance geopolitical headlines against impending financial reports, analysts emphasize that market stability will hinge on incoming earnings data. Investors will be monitoring commentary from enterprise technology leaders to determine whether the massive capital expenditures poured into artificial intelligence infrastructure are translating into sustainable corporate revenue.

What to watch next:

• Corporate earnings reports from major technology and electric vehicle firms, including Meta Platforms and Tesla, which will test artificial intelligence sentiment.
• Further developments regarding U.S.–Iran negotiations and their impact on global crude oil supply and energy prices.
• Movements in U.S. Treasury yields and their downstream effects on technology valuations and borrowing costs.

Explore more market updates through our dedicated Business coverage, read about how Nasdaq futures gain as investors buy the dip in the AI trade, track US stock futures edge higher ahead of key inflation data and bank earnings, or review how US stocks rise toward finish of record-setting week.