The Nasdaq Composite surged more than 1% on Monday, driven by a rebound in technology and semiconductor stocks ahead of major AI-related earnings reports. Meanwhile, European stocks and the euro declined as escalating unrest in France heightened concerns about the country's fiscal stability.
Wall Street showed signs of recovery following last week's technology selloff. The Nasdaq climbed 1.11% to 26,430.89, while the S&P 500 gained 0.41% to 7,690.73. The Dow Jones Industrial Average slipped 0.07% to 51,966.03.
Semiconductor stocks advanced 1.6%, recovering from eight consecutive sessions of losses, their longest losing streak since 2008.
Investors are closely monitoring upcoming earnings from Meta, Tesla, Lam Research, and Texas Instruments for evidence that substantial artificial intelligence investments are generating sustainable returns.
Goldman Sachs estimates that five major AI hyperscalers could increase their combined capital expenditures to approximately $1.2 trillion next year, intensifying scrutiny of AI infrastructure spending.
Peter Cardillo, chief market economist at Spartan Capital Securities, said investors were taking advantage of the recent market correction. However, he warned that upcoming technology earnings would provide a crucial test of confidence in AI investments.
Meanwhile, US Treasury yields increased as concerns surrounding elevated borrowing costs eased. The benchmark 10-year Treasury yield rose 4.2 basis points to 5.14%.
Economic uncertainty persisted after the US housing market index declined three points to 29, its weakest reading since June 2012. Federal Reserve Chair Kevin Warsh recently indicated that policymakers were not rushing toward additional interest rate increases.
Across Europe, French political unrest triggered declines in stocks, bonds, and the euro. The STOXX 600 dropped 0.8%, while France's CAC 40 lost 1.1%.
France's 10-year government bond yield climbed to 4.9%, with its spread over German bonds widening to 147 basis points, levels associated with the European debt crisis.
The euro weakened 0.24% to $1.1212, while the US dollar index advanced 0.17% to 101.97.
Commodity markets delivered mixed performances. Brent crude settled at $109.55 per barrel, while US West Texas Intermediate rose to $103.66 amid renewed Middle East tensions.
Gold prices declined 0.61% to $4,139.67 per ounce.
Investors now await major AI earnings reports, which could determine whether the technology sector's recovery continues despite rising bond yields and global economic uncertainty.
