US stock market: AI chip rally lifts futures in 2026

A rebound attempt after a sharp tech selloff

US stocks tried to stabilise after a heavy technology-led selloff, with traders positioning ahead of key CPI inflation data later this week. Early strength was linked to a renewed bid for chipmakers and AI-linked infrastructure names, following what was described as Friday’s worst session of the year on Wall Street after the chip sector fell about 10%. The tone also improved as signs of tensions easing in the Middle East reduced immediate risk appetite pressures. Even with the rebound effort, trading remained sensitive to macro data, geopolitical updates, and positioning around the crowded AI theme.

Where the major indices stood after the selloff

A snapshot of index levels showed steep declines in the prior move, highlighting how sharp the risk-off stretch had been. The S&P 500, Dow, and Nasdaq were all lower in that readout, with the Nasdaq showing the largest percentage fall among the three.

Monday’s open: “buy the dip” shows up in chips

At the Monday market open, stocks moved higher as traders stepped back into beaten-down chip names. The move was characterised as “buy the dip” activity following the sector’s steep drop. That bounce mattered because semiconductors and AI infrastructure have been key drivers of the broader market’s performance in recent months. When chips fall sharply, index-level volatility tends to rise because of their outsized influence within major benchmarks.

AI spending narrative keeps the rally intact

Commentary in the flow of coverage pointed to an “incredible rally” that remained largely intact, with AI and technology continuing to provide the core support. The underlying idea was straightforward: ramped-up AI spending is sustaining demand expectations for hardware, servers, and networking, and that narrative continues to influence equity positioning. Even so, the same concentration can narrow market breadth, making sessions more sensitive to moves in a handful of large or high-momentum tech names.

Tuesday: benchmarks recover from early losses and hit highs

In one update, US stock indexes recovered from early declines on Tuesday and finished higher, with the S&P 500, Dow industrials, and Nasdaq 100 reported to be at new all-time highs. The S&P 500 closed up 0.13%, the Dow closed up 0.45%, and the Nasdaq 100 closed up 0.48%. Futures also pointed upward in that sequence, with June E-mini S&P futures up 0.14% and June E-mini Nasdaq futures up 0.48%.

Stock-specific moves: Marvell, HPE, Dell and the chip complex

Several single-stock moves stood out as evidence of how strongly AI-linked guidance and commentary are moving prices. Marvell Technology surged more than 32% after Nvidia CEO Jensen Huang said it would be the next company to reach a $1 trillion valuation, described as more than five times its current market capitalisation. Hewlett Packard Enterprise gained more than 19% after issuing an outlook for annual sales that topped estimates, citing massive growth in AI-fuelled demand for servers and networking. Dell Technologies was up more than 30% after providing a sales outlook that exceeded analysts’ estimates by a wide margin.

Chipmakers broadly joined the move, with Qualcomm and Arm Holdings up more than 4%, while Intel and Broadcom gained more than 3%. The clustering of these gains reinforced the point that semiconductors and supporting infrastructure remain central to near-term index direction.

Geopolitics and oil: why the Middle East mattered

Alongside earnings and AI demand signals, geopolitical headlines were a second key driver. Prospects for a peace deal in the Middle East were cited as easing pressure on crude oil prices and reducing inflation concerns. For equity markets, the linkage is important because lower oil-related inflation pressure can influence expectations for interest rates and financial conditions. With CPI data also in focus, any shift in energy-driven inflation expectations can quickly show up in sector rotation and index leadership.

Mixed sessions and profit-taking: the Nasdaq diverges at times

Not every update pointed to uniform strength across US indices. One session noted the Dow closing at another record while the Nasdaq fell as investors took profits in high-flying AI stocks. Another update flagged that the market rebound came late in the day even as Nvidia fell 2.96%, showing how leadership can rotate within tech rather than lifting all names together. AMD was up 5.9% in premarket trade in one instance, reflecting how quickly attention shifts based on AI spending signals.

Asia and India cues: Gift Nifty points to a positive open

Asian markets were described as mixed ahead of a meeting between US President Donald Trump and China’s President Xi Jinping, a reminder that trade and geopolitics remain a live factor for risk assets. Japan’s Nikkei 225 rose 0.66% while the Topix fell 0.23%. South Korea’s Kospi gained 1.63% and the Kosdaq rose 1.31%. For Indian markets, Gift Nifty was cited around 23,540, about 78 points above the previous Nifty futures close, indicating a positive start for domestic indices.

A quick scoreboard: select index closes and futures signals

The sequence of updates showed shifting but generally resilient risk sentiment, led by tech and AI themes.

What to watch next: CPI, Fed signals, and the AI trade

Near-term direction is likely to remain anchored to three inputs highlighted across the updates: CPI inflation data later this week, commentary from Federal Reserve officials, and geopolitical developments involving the Middle East and US-China ties. The price action also suggests investors are still testing how much of the AI-driven rally is supported by guidance and how much is momentum-driven positioning. With large, fast moves in names tied to servers, networking, and chips, the market is signalling that earnings and outlook statements in AI infrastructure can overwhelm broader macro narratives on individual days.

Conclusion

US equities have been choppy but supported by renewed strength in chipmakers and AI infrastructure, even as inflation data and geopolitics keep risk appetite fragile. The next clear catalyst is the upcoming CPI print, alongside ongoing headline risk from the Middle East and US-China developments.