Chip Stocks Rebound Monday as Wall Street Braces for Big Tech Earnings This Week

Wall Street caught its breath Monday, July 20. The S&P 500 gained 0.4% by midday in New York. The Nasdaq 100 jumped 1%, clawing back part of what TradingView called its weakest week in nearly a month.

Semiconductors led the rebound. The Philadelphia Stock Exchange Semiconductor Index climbed 2.3%, a bounce-back after the index tipped into a bear market on Friday. That's a 20% drop from a recent high, and Monday's gain doesn't erase it.

Nvidia rose 1.3%. Sandisk jumped 6.1%. Marvell Technology climbed 6.3%. AMD, Intel, and Micron all moved higher too, according to both TradingView and Briefs Finance. Nvidia's stock has more than doubled this year, per Briefs Finance, which makes its upcoming earnings report significant.

This wasn't a broad rally. The equal-weighted S&P 500, which strips out the outsized influence of mega-cap tech, was flat. About 280 stocks in the index fell Monday while just over 220 rose. Trading volume ran roughly 20% below the 30-day average. A handful of chip names did the heavy lifting, and most of the market shrugged.

Earnings Week Is the Real Test

More than 80 S&P 500 companies are scheduled to report results this week. Alphabet and Intel are expected to give investors a read on how AI spending is actually flowing through corporate results. Tesla reports Wednesday. Apple and Tesla shares fell Monday and were the biggest point-drags on the index, per TradingView.

Tom Essaye, founder of The Sevens Report newsletter, said investors want strong earnings and continued AI demand, but also want proof companies aren't just recklessly doubling down on AI infrastructure spending without discipline. Briefs Finance quoted him saying markets want "evidence of restraint and a focus on stability and not a further doubling down on the current AI component spending war."

Companies have poured enormous capital into AI data centers and chips based on projected demand that hasn't fully proven out yet in revenue. If Alphabet, Microsoft, or Intel show spending accelerating faster than returns, that's a legitimate concern for anyone holding these stocks.

Briefs Finance reported S&P 500 earnings growth is now projected at 26% for the period, which it called one of the highest figures outside a post-recession rebound. That's a Wall Street estimate, not a reported number, and it sets a high bar. Miss it and the market has room to fall further given how far chip stocks already ran this year.

Individual Stock Moves Tell Their Own Story

Lumentum Holdings, which makes optical and photonic equipment, surged 8% Monday after Barclays upgraded it from equal-weight to overweight, making it the S&P 500's top performer. Chipotle Mexican Grill fell about 4%, the index's biggest decliner. Domino's Pizza gained nearly 2% after second-quarter revenue beat estimates. AMC Entertainment rallied 22% after both earnings and revenue topped expectations. Fervo Energy rose 5% after a Jefferies upgrade following its pullback from IPO highs.

Energy stocks reversed early losses to gain almost 1% as oil prices whipsawed on Middle East conflict headlines. Gold held steady as traders watched the same conflict for inflation signals, a dynamic that ties directly into whether the Federal Reserve, currently in a quiet period ahead of its next meeting, has room to keep rates where they are.

What's Actually Unresolved

The semiconductor selloff that hit a bear-market threshold on Friday came from real concerns: softening demand signals in parts of the chip supply chain and geopolitical export curbs, according to Briefs Finance. Monday's bounce came on lighter-than-average volume, which is a caution flag on its own. Light volume rallies are easier to reverse than ones built on heavy buying conviction.

The next few days will settle whether Monday was a genuine turn or a dead-cat bounce ahead of Wednesday's Tesla report and the wave of Big Tech results that follow. Nvidia's own earnings, still pending, loom as the biggest single catalyst for whether the AI trade holds up or cracks further.