Semiconductor Stocks Surge Amid Changing Tariff Expectations

The S&P 500 and Nasdaq Composite rose, driven by gains in semiconductor stocks and reports of a potentially less aggressive tariff stance by the Trump administration. Tech and communication sectors performed well, bolstered by Microsoft's AI investment plans, while automakers like Ford and GM responded to tariff-related news.

The S&P 500 and Nasdaq Composite experienced a boost on Monday, fueled by semiconductor stock gains and a report suggesting the Trump administration might ease its tariff stance. The S&P 500 increased by 32.96 points, reaching 5,975.98, while the Nasdaq Composite rose by 243.30 points, hitting 19,864.98. However, the Dow Jones Industrial Average saw a slight decline, dropping 22.40 points to close at 42,709.73.

Despite most S&P 500 sectors closing lower, communication services and tech stocks climbed significantly. Simplify Asset Management's Michael Green noted that a rally concentrated on the largest stocks and 401(k) fund flows are bolstering the upward trend. Chipmakers like Nvidia, AMD, and Micron Technology saw gains, aided by Microsoft's $80 billion AI-driven data center investment and Foxconn's strong earnings.

Tech stocks rose despite high 10-year Treasury yields. Ford and GM shares increased amid tariff-related discussions, although President-elect Trump clarified his tariff policies, indicating they won't be as severe as initially feared. Investors are keenly watching Trump's policies for their potential impact on the economy and corporate profits, particularly regarding inflation and upcoming Federal Reserve decisions.

(With inputs from agencies.)