The S&P 500’s best jump in months came earlier this week when chipmakers led a 1.6% rebound, a move that helped soothe nerves after last week’s tariff shock.
It was an AI story at heart, with semiconductors at the tip of the spear as traders sprinted back into risk. That burst set up a constructive tone heading into midweek, but it also raised the bar for what comes next.
By Wednesday’s close, the rally was still intact but more restrained. The S&P 500 added roughly 0.4% while the Nasdaq rose 0.7%; the Dow slipped slightly as gains in Big Tech and banks did the heavy lifting.
AMD paced chip advances, part of a broader rebound that included Nvidia and peers after upbeat cues from the equipment side of the industry.
What changed overnight was not a single headline so much as the mix. U.S. equity futures wobbled in Asia and early Europe on Thursday, at times indicating a weaker open as investors digested a thicket of earnings updates and trade rhetoric.
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By the latest read, contracts were little changed to modestly firmer, underscoring how quickly sentiment is swinging around intraday signals.
Dutch toolmaker ASML’s orders surprised to the upside, reinforcing the narrative that AI-related spending continues to pull forward demand across the chip stack.
That leaves outsized index sensitivity to a handful of names, especially with Taiwan Semiconductor’s results on deck and investors parsing any commentary on supply, pricing, and China.
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Morgan Stanley and Bank of America rallied after quarterly numbers beat expectations, a reminder that dealmaking and trading can still offset pockets of consumer and credit caution.
The sector’s strength helped broaden participation beyond megacap tech, even if the tape remained headline driven.
Gold notched fresh records as safe-haven demand climbed in step with U.S.–China tension and rising expectations for Federal Reserve rate cuts, while oil edged higher after remarks that India would curtail purchases of Russian crude.
Those moves are the flip side of the equity story: strong enough risk appetite to buy chips and banks, but enough anxiety to keep hedges in vogue.
After an early-week sprint, Wednesday’s session faded from intraday highs before finding its footing again, a pattern that has characterized much of October.
The rotation into semis and money-center banks helped, but overnight futures action suggests the market remains hypersensitive to policy sound bites, export controls, and any sign that AI capex could cool.
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Chips carry heavy index weight, which magnifies both the upside and the air pockets that follow hot streaks.
If upcoming prints from key suppliers and customers reinforce ASML’s order book and keep AI infrastructure spending on track, the bull case extends. If not, a soft patch could quickly spill into broader benchmarks.
The Nasdaq hits new all-time high momentum seen earlier this month has already cooled into a choppier, headline-sensitive tape.
With a government shutdown muting some data flow and traders leaning on high-frequency cues, each incremental corporate update is punching above its weight.
That magnifies opening prints and after-hours moves, which is why an orderly, broadening advance will likely require confirmation from earnings across sectors, not just the AI complex.
In short, chips lifted the market, but the baton now passes to a less forgiving tape.
Futures are signaling that sentiment can flip quickly, and the next leg will hinge on whether earnings and guidance can meet the loftier expectations that this week’s bounce created.
