Nasdaq climbs as chip and AI-linked stocks bounce back

The tech-heavy Nasdaq Composite led Wall Street's rally on Monday as investors returned to the chip sector and other AI-related stocks following a sharp sell-off the previous week, while they awaited key corporate earnings reports. The S&P 500 and Nasdaq indexes had suffered their largest weekly decline since late June on Friday, as worries over higher interest rates potentially stifling investments in AI infrastructure weighed heavily on technology stocks, particularly data center operators.

The selloff stemmed from growing investor anxiety about how the expensive AI expansion would be funded, a matter that has increasingly troubled firms sustaining the U.S. bull market, which had just celebrated its fourth anniversary. The Philadelphia Semiconductor Index rebounded about 2 percent, signaling a potential end to an eight-day losing streak during which it plummeted 15.7 percent, marking its most extended period of declines since October 2008.