US stocks closed slightly higher on Monday, with the S&P 500 gaining 14.62 points (0.20%) to end at 7,413.55 points, while the Nasdaq Composite rose 25.88 points (0.10%) to 26,272.96 and the Dow Jones Industrial Average increased 100.46 points (0.20%) to 49,709.62. According to reports from The Economic Times, the modest gains came despite mixed market conditions, with AI-driven momentum in semiconductor shares offsetting concerns over rising crude prices and stalled US-Iran peace negotiations that kept inflation worries alive. The S&P 500 and Nasdaq 100 posted new all-time highs amid strong corporate earnings results and resurgent optimism around artificial intelligence, though gains were limited by rising oil prices and bond yields after the US and Iran failed to reach terms to end the war in the Middle East.
Semiconductors significantly outperformed other sectors as artificial intelligence-related momentum continued unabated, with chipmakers outperforming the broader market. As reported by The Economic Times, Ross Mayfield, investment strategy analyst at Baird, noted that "the semis and AI infrastructure trade has taken on a life entirely of its own" with so much momentum and chasing to get in on these names that it seems divorced from headline announcements. Intel rose on Monday, building on Friday's 14% surge following a report of a preliminary chip-making agreement with Apple, while peer Qualcomm jumped to a record high. Qualcomm (QCOM) is up more than +8% to lead gainers in the Nasdaq 100, and Western Digital (WDC) is up by more than +6%. Media major Fox Corp also rose after beating third-quarter revenue estimates. Nvidia (NVDA) is up more than +3% to lead gainers in the Dow Jones Industrials, while Micron Technology (MU) and Seagate Technology Holdings Plc (STX) are up more than +5%, and Applied Materials (AMAT) is up more than +2%. The semiconductor sector's strong performance reflects the broader AI infrastructure boom that continues to drive investor interest across the technology sector.
The first-quarter reporting period is nearing completion, with 446 of the companies in the S&P 500 having reported, of which 83% have topped earnings expectations, according to LSEG IBES data reported by The Economic Times. As of today, Q1 S&P 500 earnings are projected to climb +12% year-on-year, according to Bloomberg Intelligence. As of Friday, analysts estimated first-quarter S&P 500 earnings growth of 28.6% year-on-year, nearly double the 14.4% first-quarter growth estimates as of April 1. Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, noted that "the strength of the rally largely is a function of earnings growth, which is superb." Q1 S&P 500 earnings are projected to increase around +3% when stripping out the technology sector, the weakest in two years, highlighting the sector's outsized contribution to overall market performance.
Despite strong earnings performance, focus returns to macroeconomic concerns as the earnings season nears completion. As reported by The Economic Times, President Trump dismissed Iran's response to a U.S. peace proposal, causing crude prices to spike and stoking concerns that a prolonged conflict will keep upward pressure on inflation, particularly at the gasoline pump. WTI crude oil prices are up by more than 2% today, as optimism that the US and Iran would reopen the Strait of Hormuz was dashed after President Trump on Sunday said that Iran's latest peace proposals were "totally unacceptable." The strait remains essentially closed, as about a fifth of the world's oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, with the drawdown potentially reaching 1 billion bbl by June. Investors will closely monitor the Labor Department's Consumer Price Index and Commerce Department's retail sales report this week for signs that the surge in energy prices is affecting broader inflation or consumer spending behavior.
Companies scheduled to report this week include tech networking giant Cisco and semiconductor equipment maker Applied Materials, while heavyweights Nvidia and Walmart are due to report later in the month. According to The Economic Times, later this week, President Trump is due to meet Chinese counterpart Xi Jinping in Beijing for talks covering the Iran war, trade, nuclear weapons, Taiwan, artificial intelligence and possible extension of a critical rare earth minerals deal. Some airline stocks slipped as rising oil prices threatened to squeeze margins, highlighting the impact of higher energy costs on various sectors. Alaska Air Group (ALK), Carnival (CCL), and Royal Caribbean Cruises Ltd (RCL) are down more than -4%, and American Airlines Group (AAL) and Norwegian Cruise Line Holdings (NCLH) are down more than -3%, as the +2% increase in WTI crude oil prices boost fuel costs and undermine the companies' profitability prospects.
