Wall Street Highlights: S&P 500 Gains, Nasdaq Jumps More Than 2% as Dip Buyers Lift Tech Stocks

Earlier, South Korea unveiled a massive spending plan on chips and data centers. The nation is orchestrating investments of at least 1,350 trillion won ($880 billion) from companies including Samsung Electronics Co. and SK Hynix Inc., an amount that it framed as essential to surviving the AI era.

The move, which comes after declines from Samsung and SK Hynix played a factor in last week’s tech selloff, will be “keenly watched” by investors, according to Russ Mould, investment director at AJ Bell.

“Investors must decide if this money is being spent wisely, particularly as markets have been jittery of late around the scale of investment in all things AI and whether the potential returns are worth it,” Mould said.

Fed Independence

Meanwhile, the US Supreme Court reinforced the Federal Reserve’s independence from the White House, protecting governors from being fired by the president without proof of wrongdoing. The Fed shield came even as the court in a separate ruling Monday expanded the president’s power to fire top government officials at other federal agencies in a blockbuster ruling that overturns a 91-year-old precedent.

As a result, the high court said Fed Governor Lisa Cook could remain in her post while she fights Trump’s bid to oust her for unproven mortgage fraud allegations. The ruling, for new Fed Chairman Kevin Warsh, is “mostly a win, for the simple reason that now Trump can’t fire Warsh,” said Michael Feroli, chief US economist at JPMorgan Chase & Co.

“But it also means that Warsh is now dealing with a Board that is more assured of their job security,” Feroli wrote in a note on Monday. “So, for the task forces to get anything done, they will have to actively engage the Board and the Committee, rather than just validate the chair’s prior beliefs.”

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Middle East Factor

The US and Iran agreed to stop attacking each other before peace talks resume this week over the Strait of Hormuz and other issues. The move signals a de-escalation of hostilities after days of tit-for-tat strikes that threatened to unravel the truce.

Technical talks are scheduled to continue on all aspects of a memorandum of understanding reached this month, a US official speaking on the condition of anonymity told Bloomberg News. The official added that both sides will stand down for now and vessels can move freely.

“Despite short term violations of the ceasefire, we believe that US and Iran will agree to a deal,” wrote Mohit Kumar at Jefferies. “We do not think that a deal would provide a long term solution to the Middle East issues, but is more likely to be a patch to get oil flowing through the SoH.”

Oil prices have moved higher, with Brent crude now hovering at around $73 per barrel.

Among single-stock moves, Comcast Corp. gained 4.5% after announcing plans to spin off NBCUniversal and Sky. Shares in peer Charter Communications Inc. surged 9.4%.

Martin Marietta Materials Inc. shares fell 5.7% after the company agreed to combine with building materials supplier Lhoist North America in a transaction valued at $13.5 billion, including debt. FuelCell Energy Inc. soared 24% after it was approved for a $49 million financing package from the Export-Import Bank of the United States.

Meanwhile, Super Micro Computer Inc. dropped 8.1% after its offices in Taiwan were raided by government authorities, widening an investigation into alleged smuggling of Nvidia Corp. chips into China using the company’s servers.

“I’m looking at alternatives to SMCI here,” said Bob Lang, chief options analyst at Explosive Options, adding that Dell Technologies Inc. could benefit. “The last time Super Micro ran into some trouble or some difficulty, it was a slam dunk for Dell. They picked up a lot of business and a lot of customers.”

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Sectors in Focus

• Chip stocks rebounded following a 5.3% decline in the Philadelphia Semiconductor Index on Friday, with equipment stocks leading gains during the session, after South Korea’s Samsung and SK Hynix set out plans to build two chipmaking plants. 
• Shares in satellite and space-linked companies rallied as a report of Japanese subsidy, as well as Rocket Lab Corp.’s merger agreement, buoyed stocks in the sector. 
• Tesla Inc. shares jumped, with the electric vehicle company expected to release second-quarter delivery figures this week. Rivian Automotive Inc. and Lucid Group Inc. also advanced. 
• Movie theater stocks tumbled after Toy Story 5’s otherwise stellar run commanded a smaller weekend haul than expected. Analysts continue to project a resilient tide of June box office revenue.