US Stocks Open Higher: Chip Stocks Rebound Ahead of AI Super Earnings Week

US stocks opened higher on Monday (20th), with chip stocks rebounding after last week's decline, lifting tech shares. Market focus has shifted to the upcoming earnings reports from tech giants this week, hoping to find direction in AI investment and capital expenditure outlook.

Meanwhile, US-Iran tensions continue to influence market sentiment, but as expectations grow for renewed negotiations, international oil prices retreated from highs, easing energy cost pressures and boosting overall risk appetite, driving all three major Wall Street indices higher at the open.

At press time, the Dow Jones Industrial Average was up nearly 140 points or 0.3%, the Nasdaq Composite up nearly 270 points or 1.1%, the S&P 500 up nearly 0.7%, and the Philadelphia Semiconductor Index surged over 3.0%. TSMC ADR rose nearly 2.7%.

US stock index futures rose in pre-market trading, with market sentiment stabilizing on the back of chip stock rebounds. Investors are now turning their attention to tech giants' earnings this week, hoping to determine whether the recent sharp volatility in tech stocks has ended. Meanwhile, US-Iran tensions continue to unfold, causing oil prices to fluctuate amid mixed news.

In pre-market trading, Nasdaq 100 futures rose 0.9%, ending a three-day losing streak; S&P 500 futures gained 0.4%. Semiconductor-focused ETFs rose 2.5%, lifting tech stocks. In Hong Kong, Alibaba's stock rose after unveiling a preview of its latest flagship AI model.

Markets are also monitoring the latest developments in the Middle East. On one hand, reports suggest the US and Iran may pursue a new ceasefire deal; on the other, Yemen's Houthi movement has announced a maritime blockade on Saudi Arabia, reigniting energy supply risks. Oil prices initially rose but later gave up gains, with US West Texas Intermediate (WTI) retreating to around $82.60 per barrel.

Joachim Klement, Strategy Head at Panmure Liberum, said the market still broadly expects the US and Iran to eventually return to negotiations. Oil prices would only reflect prolonged supply risks if talks completely collapse.

AI remains a key market theme. Chinese AI startup Moonshot AI recently launched a new model, claiming it can achieve top-tier AI performance at a fraction of the cost of US rivals, prompting a reassessment of AI supply chain beneficiaries. However, analysts note that while the new model improves computational efficiency, it still requires substantial hardware resources like high-bandwidth memory (HBM), so semiconductor demand may not be negatively impacted.

The market now faces its biggest test of the week. Alphabet (GOOGL-US) will report earnings on Wednesday, kicking off the earnings season for AI hyperscalers. Chip stocks, which led the US market rally this year, have recently corrected due to concerns over slowing AI capital spending. Investors will closely watch tech giants' capital expenditure plans and whether AI investment continues to expand.

Andrea Gabellone, Global Equities Head at KBC Securities, said the market's main focus this week will be on hyperscalers' profitability and capex plans. If management sends positive signals, it could reassure markets worried about cooling AI investment.

Additionally, US and European government bond yields rose as markets began pricing in inflation risks from Middle East tensions. US gasoline retail prices have climbed back above $4 per gallon. Dollar, gold, and bitcoin volatility remained limited, suggesting investors are waiting for further developments, with overall risk appetite not yet showing a clear shift.

As of around 9 PM Taipei time on Monday (20th):

- Dow Jones Industrial Average: +152.54 points (+0.29%) at 52,298.96 - Nasdaq Composite: +258.34 points (+1.01%) at 25,778.59 - S&P 500: +47.41 points (+0.64%) at 7,505.10 - Philadelphia Semiconductor Index: +352.59 points (+3.02%) at 12,026.48 - TSMC ADR: +2.52% to $408.29 per share - 10-year US Treasury yield: up to 4.56% - NY Light Crude: down $0.51 to $81.36 per barrel - Brent Crude: down 0.34% to $87.80 per barrel - Gold: down 0.07% to $4,015.80 per ounce - Dollar Index: up to 100.90

Key stocks:

- SpaceX (SPCX-US): down 0.03% to $123.96 in early trading. Pre-market rose over 1%. The company announced it has delayed the launch of its next-generation heavy-lift rocket 'Starship' to Thursday. The launch was previously canceled due to engine issues. Markets are watching whether this attempt will succeed, a key step for future testing.

- Alibaba (BABA-US): up 3.36% to $118.83. Pre-market rose over 3%. The company previewed its latest AI model 'Qwen3.8 Max', claiming its overall capability ranks just below Anthropic's latest flagship model 'Fable 5'. Markets view Alibaba's continued AI investments positively, potentially enhancing its competitiveness in the generative AI space.

- Domino's Pizza (DPZ-US): up 4.29% to $336.00. Pre-market surged over 7.5%. Despite Q2 earnings missing expectations, revenue slightly beat forecasts, and management provided an optimistic outlook, boosting investor confidence. The CEO said delivery and carryout order volumes saw meaningful growth, indicating resilient consumer demand.

Today's key economic data:

- None

Wall Street analysis:

Since mid-July, leading South Korean semiconductor firms like Samsung Electronics and SK Hynix have seen sharp stock declines. SK Hynix's shares have fallen nearly 40% from their all-time high set last month.

Over 1.2 million leveraged trading accounts in South Korea have triggered margin calls, with 320,000 to 360,000 accounts facing forced liquidation. Some 2x leveraged ETFs tracking the semiconductor sector saw peak drawdowns exceeding 66%.