US Stock Market Pre-Market: Chip Stocks Extend Rebound! Major Indices Open Higher as Market Focuses on Big Tech Earnings

Major US indices opened higher on Tuesday (21st), as semiconductor stocks extended their rebound following recent heavy selling. Bargain hunters are betting that AI-driven trades, which have supported the broader bullish trend in US equities, still have room to rise. Investors are temporarily downplaying the latest developments in the US-Iran conflict, shifting focus to corporate earnings, awaiting results from major tech companies to gauge AI demand, capital spending, and the outlook for related sectors.

At the time of writing, the Dow Jones Industrial Average was up nearly 200 points or 0.4%, the Nasdaq Composite Index rose nearly 240 points or 1.0%, the S&P 500 Index gained about 0.5%, and the Philadelphia Semiconductor Index surged over 4.0%. TSMC ADR climbed 3.9%.

Global stock markets rose Tuesday as investors bought into previously battered chip stocks, driving a tech-led rally. Meanwhile, the US and Iran launched attacks against each other for the 10th consecutive day, pushing Brent crude oil prices above $90 per barrel, with energy supply risks continuing to weigh on markets.

Nasdaq 100 futures rose 1.3%, and an ETF closely watched by the market that tracks chip stock performance surged 4.2% in pre-market trading, while S&P 500 futures gained 0.4%.

In Asia, strong export data from South Korea and Taiwan boosted market confidence, lifting shares of Samsung Electronics and TSMC (2330-TW)(TSM-US); European markets also saw tech stocks leading gains. Gold headed toward its biggest single-day gain in a week, US Treasury prices were volatile, and the dollar remained largely unchanged.

Chip Stock Valuations Cool as Investors Rebuild AI Positions

After semiconductor stocks posted their worst weekly performance in over a year, some investors believe valuations have returned to more attractive levels and are stepping in to buy. The semiconductor industry has been one of the biggest beneficiaries of the global AI build-out, but recent trading has been volatile, with market concerns over stretched valuations and whether major cloud service providers can sustain massive capital expenditures.

UBS's trading desk believes the sell-off in momentum stocks may be nearing its end, creating opportunities for investors to re-establish positions in AI and chip stocks.

Mateo Yanguas, Head of Equities at CaixaBank Asset Management, said market concentration remains high in some areas, and volatility could stay elevated, but this correction has been deep and long enough to alleviate some valuation concerns.

Market focus is shifting toward major tech earnings, with investors set to scrutinize the latest capital expenditure plans from AI hyperscalers. Alphabet is scheduled to report earnings on Wednesday, followed by Microsoft, Meta, and Amazon next week.

Florian Ielpo, Chief Investment Officer at Lombard Odier Investment Managers, said the market's next test is no longer whether AI demand exists, but whether pricing, margins, and cash flow can justify massive capital spending. If the answer is yes, the rebound could spread to more stocks; otherwise, high volatility will remain the norm.

Alexandre Drabowicz, Chief Investment Officer at Indosuez Wealth Management, believes investors don't need to choose between chip stocks and hyperscalers—they should hold both. Alphabet's upcoming earnings will be a key barometer for the AI industry, offering insight into tech giants' ability to monetize AI, and the market may be underestimating how quickly these companies can turn AI into revenue.

Middle East Conflict Pushes Oil Prices Higher; Goldman Warns of $120+ Risk

Despite improved sentiment in tech stocks, further oil price gains pose inflation and economic risks. Yemen's Houthi movement has warned shipowners to avoid all Saudi Arabian ports, highlighting the threat to millions of barrels of daily crude exports.

Goldman Sachs analysts warn that Brent crude prices could rise above $120 per barrel in Q4 this year. This is not the bank's base case, but the risk is clearly skewed upward compared to its current year-end forecast of $80.

UK bond prices edged lower as investors await more policy details from new Prime Minister Andy Burnham; weak economic data reduced market bets on rate hikes. The London Stock Exchange also announced it will launch a new trading platform outside normal hours to offer near-24/7 trading.

Bloomberg strategist Montgomery Koning noted that the S&P 500 has largely traded sideways over the past two months, with markets hoping for strong earnings while worrying about rising speculative sentiment. Whether this correction is a healthy pause extending the AI rally or the start of a deeper downturn will heavily depend on the upcoming earnings season.

As of around 9 PM Taipei time Tuesday (21st):

Dow Jones Industrial Average: Up 224.49 points or 0.43%, at 52,063.75

Nasdaq Composite Index: Up 222.53 points or 0.87%, at 25,730.60

S&P 500 Index: Up 39.02 points or 0.52%, at 7,482.30

Philadelphia Semiconductor Index: Up 558.09 points or 4.75%, at 12,301.94

TSMC ADR: Up 3.58% to $416.96 per share

10-year US Treasury yield: Up to 4.61%

NY Crude Oil: Up 2.29% to $84.37 per barrel

Brent Crude: Up 1.92% to $90.93 per barrel

Gold: Up 1.06% to $4,058.50 per ounce

Dollar Index: Up to 101.66

Key Stocks:

General Motors (GM-US): Up 0.74% in pre-market, at $76.36 per share

GM reported Q2 adjusted EPS of $3.57, beating LSEG analyst consensus of $3.20; revenue of $48.03 billion, also above the $47.01 billion market expectation.

3M (MMM-US): Up 8.37% in pre-market, at $172.43 per share

3M surged over 5% pre-market. The US conglomerate, known for Scotch tape and Post-it notes, reported Q2 revenue and earnings above expectations and raised its full-year outlook.

Domino's Pizza (DPZ-US): Down 0.29% in pre-market, at $328.00 per share

Domino's Pizza reported Q2 EPS of $4.07, below LSEG analyst consensus of $4.17; revenue of $1.19 billion, slightly above the $1.18 billion market expectation.

Today's Key Economic Data:

None

Wall Street Analysis:

According to a report released by the Semiconductor Equipment and Materials International (SEMI), global semiconductor equipment sales are expected to grow 23.2% in 2026 to $165.9 billion, reaching a record high of $229.5 billion by 2028. SEMI represents approximately 3,000 electronic design and manufacturing companies worldwide.

The association said expansion of AI infrastructure and investments in advanced logic chips and next-generation memory products, including High Bandwidth Memory (HBM), will drive market growth.