Chip Stocks Drive Market Gains
Nasdaq gains and chip stocks rally despite rising Treasury yields and oil prices
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Key Points
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September’s performance was uneven: the Nasdaq rose about 1.9%, while the Dow fell 4.3% and the S&P 500 lost 0.5%. For the third quarter, the S&P 500 and Nasdaq each gained about 2%, while the Dow declined 2.7%.
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Micron said its revenue quadrupled in its latest quarter and its profit margin reached 87%, alongside its stronger forecast and customer commitments.
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Several software and technology stocks posted sizable gains at the October 1 open: Synopsys rose 10.10%, Cadence Design Systems gained 5.04%, and Intuit advanced 4.93%.
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In Wednesday’s session, the CBOE Volatility Index fell 1.25% to 15.84, while the small-cap Russell 2000 rose 0.28%.
U.S. stocks opened October higher on Thursday as chip makers and software companies drove gains, despite pressure from soaring Treasury yields. The Nasdaq rose 0.46% while the S&P 500 gained 0.25%, marking the start of the fourth quarter. Micron's stronger-than-expected forecast and massive customer commitments reinforced investor confidence in artificial intelligence demand, though the memory-chip maker's stock fell after the announcement.
Long-term Treasury yields hovered near multidecade highs while oil prices remained elevated. Yet semiconductor stocks extended their September rally, with Hewlett Packard Enterprise surging 6% after landing a $1.2 billion deal to supply AMD Helios AI Rack systems to cloud provider Vultr for U.S. data center deployments.
Chip Stocks Rally Despite Mixed Market Signals
Semiconductor names led Thursday's gains as investors bet on artificial intelligence demand. Intel and AMD extended a rally that put chip stocks on track for their best month since June, according to Invezz. The semiconductor rally showed renewed strength after a turbulent September that saw the broader market post uneven results.
Micron reported revenue that quadrupled in its latest quarter and profit margins that hit 87%, Invezz noted. The company gave a stronger-than-expected forecast and announced large customer commitments, signaling robust demand for memory chips used in AI systems and data centers.
Software Stocks Surge at Quarter Start
Software and design companies posted sizable gains on October 1. Synopsys jumped 10.10%, Cadence Design Systems gained 5.04%, and Intuit advanced 4.93%, providing crucial support for the tech-heavy Nasdaq, according to HDFCSky.
These gains offset pressure from rising Treasury yields and elevated oil prices. Software stocks often benefit from falling interest rates, as lower rates make their future earnings more valuable to investors today.
September's Uneven Results Set Tone for Q4
The tech-focused Nasdaq rose 1.9% in September while the Dow fell 4.3% and the S&P 500 lost 0.5%. For the entire third quarter, the S&P 500 and Nasdaq each gained about 2%, while the Dow declined 2.7%, showing widening splits between market segments.
On Wednesday, market volatility cooled. The CBOE Volatility Index fell 1.25% to 15.84, while the small-cap Russell 2000 rose 0.28%, suggesting investors saw stability returning as the new quarter began.
HPE and AMD Land Major AI Infrastructure Deal
Hewlett Packard Enterprise surged 6% after announcing a $1.2 billion commercial order from cloud provider Vultr. Vultr plans to deploy AMD Helios AI Rack systems across U.S. data centers, marking a major vote of confidence in AI infrastructure, according to Invezz.
The deal demonstrates growing corporate appetite for AI-powered rack systems as companies scale their artificial intelligence capabilities. Such large infrastructure orders typically signal confidence in sustained AI demand among major cloud and data center operators.
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