Closing Bell: AI Momentum Lifts Equities as Chip Demand Strengthens Across Markets

Key Points

• The S&P 500, Nasdaq 100, and Russell 2000 all moved higher.
• U.S. chip exports to major Chinese firms are in focus as the U.S.-China summit continues.
• Applied Materials topped estimates with record Q2 results underscored by strong AI spending.

U.S. equities continued to move higher as the AI trade gained momentum and attracted increased investor attention.

The S&P 500 rose 0.77%, the Nasdaq 100 climbed 0.73%, and the Russell 2000 advanced 0.67%. Information Technology, Energy, and Utilities led the market higher, while Materials and Real Estate lagged. At the start of the two-day summit between President Donald Trump and President Xi Jinping, the leader of China reportedly addressed assembled business leaders on how they can be involved in China’s economic reforms, according to media reports.

U.S. Clears Nvidia Chip Sales, But China Pulls Back

Nvidia’s (NVDA) effort to restart AI chip sales into China remain stalled despite U.S. approval, underscoring the deepening tech decoupling between Washington and Beijing. The Commerce Department has cleared roughly ten Chinese firms—including Alibaba (BABA), Tencent Holdings, ByteDance, and JD.com (JD) —along with distributors like Lenovo Group and Foxconn Technology, to purchase up to 75,000 H200 chips each, yet no shipments have been made. Chinese government guidance and new supply chain security rules have pushed local companies to pause orders as Beijing prioritizes domestic semiconductor development.

AMAT Tops Estimates on AI-Fueled Strength

Applied Materials (AMAT) delivered strong Q2 results that topped expectations as AI-driven demand continued to fuel semiconductor equipment spending. Revenue rose 11% year over year to $7.91 billion and adjusted EPS climbed 20% to $2.86, both ahead of forecasts. The strong results are tied to the rapid global buildout of AI infrastructure and sustained demand across advanced logic and memory. Looking ahead, AMAT offered Q3 revenue guidance of about $8.95 billion (±$500 million) and EPS guidance of $3.36 (±$0.20), while projecting its semiconductor equipment business will grow more than 30% in calendar 2026.

Economic Events for Tomorrow

8:30am: Empire State Manufacturing Index

9:15am: Capacity Utilization Rate

9:15am: Industrial Production

Earnings Calendar

Before Market Open: None

After Market Close: None

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