Tech Rally Lifts Broader Market as Chip Stocks and AI Infrastructure Gain Momentum

Market Overview

US equities are trading in positive territory today, with semiconductor and artificial intelligence-related stocks providing key support for the broader indexes. The S&P 500 is up +0.11%, while the Nasdaq 100 is outperforming with a +0.29% gain. The Dow Jones Industrial Average has inched up +0.06%. In the futures market, December E-mini S&P 500 contracts are trading +0.09% higher, and December E-mini Nasdaq-100 futures are up +0.24%.

The primary driver behind today’s advance in equities stems from renewed strength across technology and chip-related sectors. Alphabet shares surged more than +5% following disclosure that Berkshire Hathaway has accumulated a $4.9 billion position in the company. Complementing this move, semiconductor manufacturers and AI infrastructure providers have shown notable strength, contributing to the overall market’s positive bias.

Individual Stock Performance

Leading the advance among semiconductor names is Micron Technology, which has jumped over +4% after Rosenblatt Securities lifted its price target to $300 from the prior $250. Other chip and storage companies are also benefiting from the sector’s momentum, with Western Digital up more than +3%, while Seagate Technology Holdings and Lam Research have each risen more than +2%. Additionally, ARM Holdings, Applied Materials, Broadcom, ASML Holding, and KLA Corp are all trading up more than +1%.

Beyond semiconductors, significant gainers include Zymeworks, which has surged +33% and Jazz Pharmaceuticals, advancing more than +18%, both following positive late-stage trial results for their experimental cancer combination therapy. Rubrik is up more than +1% after Mizuho Securities upgraded the name to outperform. Gap and Expeditors International have also received favorable analyst coverage, driving shares higher by more than +1%.

On the downside, Dell Technologies has dropped more than -4% following a double downgrade from Morgan Stanley to underweight. HP Enterprise and HP Inc have both declined more than -3% and -2% respectively, also on Morgan Stanley downgrades. Aramark has fallen more than -6% due to Q4 revenue coming in at $5.05 billion, missing consensus expectations of $5.17 billion.

Economic Data and Rate Outlook

Positive economic surprises are providing support for today’s market action. The November Empire manufacturing general business conditions index rose unexpectedly by +8.0 to reach 18.7, a one-year high, defying expectations for a decline to 5.8. This hawkish data, however, presents some caution heading into Nvidia’s earnings announcement after Wednesday’s close.

The market is currently pricing in a 41% probability of a -25 basis point rate cut when the Federal Open Market Committee meets on December 9-10. Multiple earnings reports scheduled for this week—including Walmart, Target, and Home Depot—will offer investors additional insight into consumer spending trends.

Interest Rate Markets

December 10-year Treasury note futures are up +2 ticks today, with the 10-year yield declining -1.4 basis points to 4.135%. The Treasury market is weighing anticipation that delayed economic data releases could provide evidence of economic softness and moderating inflation, potentially supporting further Fed rate reductions. However, today’s stronger manufacturing data has trimmed some of these gains.

European government bonds are also moving higher, with the 10-year German bund yield down -1.0 bp to 2.710% and the 10-year UK gilt yield falling -3.1 bp to 4.543%. The European Commission has raised its 2025 Eurozone GDP forecast to +1.3% from a prior May estimate of +0.9%, while maintaining its 2025 inflation outlook at +2.1%. Swap markets are currently discounting just a 3% probability of a -25 bp rate reduction from the ECB at its December 18 policy meeting.

International Markets

Overseas equity markets are showing weakness today. The Euro Stoxx 50 has declined -0.94%, China’s Shanghai Composite has fallen to a 1.5-week low with a -0.46% loss, and Japan’s Nikkei Stock 225 has dropped to a 1-week low, closing down -0.10%.

Week Ahead

With Q3 earnings season nearing completion—460 of 500 S&P 500 companies have reported—results have exceeded expectations at an 82% rate, positioning this quarter as potentially the strongest since 2021. Q3 earnings growth came in at +14.6%, substantially outpacing initial forecasts of +7.2% year-over-year. Upcoming economic releases, including September jobs and real earnings data, alongside consumer spending indicators, will continue to shape market sentiment through the week.