Big Tech Stocks Power Markets Higher Monday. Is the AI Trade Making a Comeback?

Core Insights - The recent market rally, particularly in the tech sector, indicates improving investor sentiment towards AI-related stocks and optimism about a potential Federal Reserve rate cut next month [1][6]. Group 1: Market Performance - Tech stocks, especially members of the "Magnificent Seven," were among the strongest performers in the S&P 500 on Monday, following a challenging period [2]. - Tesla's shares surged nearly 7% after CEO Elon Musk announced plans to expand the company's AI chips business, aiming to produce chips at higher volumes than competitors [3]. - Alphabet's shares increased over 6%, reaching a closing record, bolstered by positive feedback on its AI model, Gemini 3, from industry leaders [3]. Group 2: Sector Dynamics - Broadcom led the S&P 500 with an 11% increase in its shares, while other semiconductor companies like Micron and AMD also saw gains, contributing to a nearly 5% rise in the Philadelphia Semiconductor Index [5]. - The tech sector's performance on Monday suggests a rebound in sentiment after a recent downturn, supported by optimism regarding a potential rate cut by the Federal Reserve [6].