Key Takeaways:
Megacap technology stocks lifted U.S. indexes Wednesday, offsetting a slide in semiconductor shares that extended the chip sector's recent pullback.
U.S. stocks edged higher Wednesday as gains in Apple and other megacap technology names offset weakness in chip stocks, market data show.
"Earnings should continue to drive the stock market higher," Ed Yardeni, president of Yardeni Research, said in a note, pointing to the upcoming second-quarter reporting season as a potential catalyst.
The technology sector led the S&P 500's advance, while semiconductor stocks declined, extending losses from earlier in the week. The divergence between megacap tech and chipmakers has widened in recent sessions as investors reassess AI-related valuations after a sharp rally in chip stocks through mid-June.
The rotation within technology comes as investors look ahead to the June Consumer Price Index report and the start of second-quarter earnings season, which will test whether corporate profits can justify elevated stock valuations.
The move Wednesday followed a volatile start to the week. On Monday, the Nasdaq Composite fell 1.6%, the S&P 500 dropped 0.8%, and the Dow declined 0.3%, as chip stocks tumbled and oil prices surged nearly 10% after President Donald Trump reinstated a blockade of Iranian ships in the Strait of Hormuz.
Apple shares have been a standout, reaching an all-time high above $323 on Monday. Citi analysts lifted their price target on the iPhone maker to $365 from $315 over the weekend, citing market share gains and strong iPhone 17 sales. The stock has gained 16% so far this year.
Among chip stocks, the pressure continued from Monday's selloff, when Micron Technology fell 4%, Sandisk dropped 9%, and the Roundhill Memory ETF declined nearly 10%. SK Hynix's U.S.-listed shares, which debuted on the Nasdaq on Friday, ended their first full trading day more than 9% lower on Monday.
The 10-year Treasury yield was near 4.62%, up about six basis points from the previous Friday's close, while the U.S. dollar index rose 0.3% to 101.28. West Texas Intermediate crude, which surged to near $78 a barrel on Monday, stabilized in Wednesday's session. Gold futures declined 2.7% to around $4,000 an ounce on Monday.
This article is for informational purposes only and does not constitute investment advice.
