Markets rebound despite Nvidia dip

Stocks rose Monday as traders moved to recover from last week's sharp drop in artificial intelligence stocks.

The broad market rally masked a specific stumble for Nvidia, the second most valuable company in the world. Shares of the chipmaker fell 5.6 percent on Monday. The decline followed reports of an internal investigation into whether CEO Jensen Huang had been targeted by a foreign intelligence effort. That scrutiny has raised questions about his future at the firm.

Nadia El Bilassy, a senior market analyst at Equiti Group, described the news as a negative headline for the tech sector. "This was just the cherry on top for investors looking to pull out of AI-linked stocks," she said. She noted that attention may shift later in the week to more critical macroeconomic data.

The Labor Department is scheduled to release the October Consumer Price Index report on Tuesday. Economists polled by Reuters expect a 2.7 percent year-over-year increase in prices. Investors are also watching for signs of a December rate hike, a possibility that remains after the strong jobs data released in October.

By 09:46 a.m. Eastern Time, the Dow Jones Industrial Average stood at 51,938.22, up 1.27 percent. The S&P 500 gained 1.48 percent to 7,485.67, while the Nasdaq Composite rose 1.87 percent to 25,038.34. Nine of the 11 major sectors in the S&P 500 finished in positive territory, with consumer discretionary and communication services leading the gains.

Brokerages including Morgan Stanley and UBS argued that last week's selloff was an overreaction. They stated that the risk of extreme regulation on data centers under a Democrat-controlled Congress is unlikely to materialize. Chip stocks generally recovered, with the Philadelphia Semiconductor Index up 3.3 percent. That index had posted its worst week since March 2025 the previous Friday.

Marvell Technology and Broadcom shares rose 5 percent and 6.5 percent, respectively. Intel and Qualcomm each gained nearly 2 percent. Major technology firms also climbed, with Microsoft, Alphabet, Meta, and Amazon up between 2.5 percent and 5 percent. Tesla and SpaceX shares advanced 4.5 percent each. KKR stock rose 1 percent after the investment firm reported a record quarterly profit, while Constellation Energy gained 2.8 percent after beating third-quarter profit expectations.