US stock markets climbed on Monday, with investors returning to technology shares after last week's wobbles in the artificial intelligence trade.
The Nasdaq 100 Index rose 1.3%, while the S&P 500 gained 0.7%, led by the information technology, communication services, and consumer discretionary sectors.
Traders are assessing whether capital will continue shifting away from chip stocks this week toward previously overlooked areas of the market.
Strategists at Morgan Stanley have indicated that US stocks may struggle to reach new highs, as investors pull money from some of this year's best-performing tech stocks.
A team led by strategist Michael Wilson noted that momentum in semiconductor shares is fading, with investors rotating into lagging stocks such as AI hyperscale cloud service providers.
Despite this, "investors don't seem to be rattled by the potential loss of market leadership from AI and semiconductors," said Joe Gilbert, a portfolio manager at Integrity Asset Management. "Today's move shows that a few negative headlines aren't enough to shake confidence."
The next test will arrive on Tuesday when Samsung Electronics Co Ltd releases preliminary earnings, offering a key signal for gauging demand for AI-related memory chips.
Separately, SK Hynix Inc formally launched its US listing roadshow on Monday, aiming to capitalize on surging investor interest driven by booming demand in the high-growth memory chip sector.
On the economic data front, the US services sector saw its pace of expansion slow in June, though firms increased hiring as cost pressures eased.
Markets are also focused on monetary policy, with the Federal Reserve set to release the minutes from its June meeting on Wednesday.
Fed Governor Christopher Waller stated that, if used effectively, policymakers signaling their future interest rate path can still play a positive role.
At the close, the S&P 500 was up 0.7% at 5,537.43.
The Dow Jones Industrial Average rose 0.3% to 39,355.91.
The Nasdaq Composite gained 1.1% to 17,621.16.
The Nasdaq 100 increased 1.3% to 19,697.87.
The Russell 2000 index advanced 0.4% to 2,009.54.