Another Dow Record: Surpassing 53,000 as AI Chip Trade Returns

The Dow Jones Industrial Average closed above 53,000 for the first time and U.S. stock indices traded higher Monday with chip and AI-linked shares leading the advance. 

The Dow ($DJI) closed up 0.29% to 53,055.91, the S&P 500 (SPX) was up 0.72% to 7,537.43, and the tech-heavy Nasdaq-100 (/NDX) rose 1.26% to 29,697.87. 

U.S. benchmark crude (/CL) futures flatlined near $68.70 per barrel, with crude-tanker traffic in the Strait of Hormuz recovering and oil-producing nations opening the spigot again. 

Three things to watch from Monday’s market action: 

Semiconductor Boomerang: Investors came back from the Independence Day holiday weekend to bargain hunt in the PHLX Semiconductor Sector Index (SOX), which rebounded by nearly 3% after an 11% dive in the first two trading days of July. Despite greater scrutiny of the sustainability of anticipated growth and profitability tied to the U.S. data center buildout, the semiconductor sector, driven by Micron Technology (MU), SanDisk (SNDK) and others, has proved a leader in this year’s bull market.  It was true again Monday among S&P 500 advancers. Topping the list were cloud networking giant Arista Networks (ANET) and semiconductor CPU and GPU producer Advanced Micro Devices (AMD), each up nearly 8%. Western Digital (WDC) was up nearly 7%, and Broadcom (AVGO), Micron, and Qualcomm (QCOM) also were among Nasdaq-100 names moving higher. There has been a rotation from and consolidation among high-flying tech names, however. 

Rates, oil and the Fed: Inflation concerns are elevated, with a war premium still baked in as crude oil prices cool off, says Charles Schwab’s Cooper Howard. The upcoming FOMC minutes likely will signal where Fed policy under new Chairman Kevin Warsh will head. The FOMC minutes from the June meeting are released Wednesday, and that is prompting a discussion on fixed income strategies in the context of lasting inflation woes. 

Downgrades for Banks, Airlines? Minor Turbulence: With much talk about sector reallocation as traders and investors reap profits from AI trades, downgrades did not seem to dent stocks Monday. Raymond James lowered its rating on Delta Air Lines (DAL), which reports earnings Friday, from Strong Buy to Outperform, but the stock slipped just 1.15%. Raymond James also downgraded JetBlue Airways (JBLU) from Market Perform to Underperform; JetBlue stock rose 0.66%. 

Meanwhile Baird downgraded Regions Financial (RF) from Neutral to Underperform, and the stock rose 0.66%. Baird also lowered its rating on M&T Bank (MTB) and Citizens Financial Group (CFG) from Outperform to Neutral. M&T shares rose 0.44% and Citizens stock was up 1.6%. Read our week in review, with the Schwab 2026 Mid-Year Market Outlook recap, and more on technology versus cyclicals. 

Economic Events for Tuesday, July 7 (ET): 

08:15AM: ADP Employment Change Weekly 

08:30AM: Balance of Trade (May) 

04:30PM: API Crude Oil Stock Change (July) 

Earnings Calendar: 

Premarket Tuesday: n/a 

Postmarket Tuesday: Enerpac Tool Group (EPAC); Penguin Solutions (PENG) 

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