Stock Market Today: Dow Ticks Up as Chip Makers Lead Rally to Kick Off Shortened Week

The Dow Jones Industrial Average (DJIA) ticked up on Monday, led by a rally in semiconductor stocks, as investors looked forward to a shortened trading week ahead of the national day of mourning for former U.S. President Jimmy Carter. The DJIA rose 4 points, or 0.04%, while the S&P 500 futures added 0.03%, and Nasdaq 100 futures inched higher by 0.05%.



The rally in semiconductor stocks was driven by positive earnings reports from Advanced Micro Devices (AMD) and Nvidia (NVDA), as well as optimism about the sector's growth prospects. AMD reported a top- and bottom-line beat in its second-quarter financial report, driven by strong growth in its data center business, particularly in sales of its graphics processing units (GPUs) used for AI model training. Nvidia also reported a top-line beat, with revenue up 36% year-over-year in the second quarter, driven by strong demand for its GPUs in AI and data analytics.



The strong earnings reports and outlook from AMD and Nvidia have contributed to a rally in chipmaker stocks. Taiwan's Foxconn, a supplier to several top firms, posted record fourth-quarter revenue on continued demand for AI products, pushing chip stocks higher. U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. (TSM) and ASML Holding (ASML) are also higher by 5% and 6%, respectively.

Investors are also anticipating remarks from Nvidia CEO Jensen Huang at the CES trade show in Las Vegas on Monday. Analysts expect that Huang's remarks will serve as a potential growth catalyst for the chipmaking giant and focus attention on the company's Blackwell GPUs, which are used to power generative artificial intelligence (AI) processes like large language models (LLMs). Nvidia stock is up 2% in premarket trading.



The rally in semiconductor stocks comes as investors prepare for a shortened trading week ahead of the national day of mourning for former U.S. President Jimmy Carter. The federal government will also be closed on that day, and bond markets may end trading early. Market watchers will get key labor market data this week, including private sector payrolls, initial jobless claims, and the December jobs report. Investors will also be watching for Federal Open Market Committee (FOMC) meeting minutes and remarks from several Fed speakers.

In summary, the Dow ticked up on Monday as chip makers led a rally to kick off a shortened trading week. The rally was driven by positive earnings reports from AMD and Nvidia, as well as optimism about the sector's growth prospects. Investors are also anticipating remarks from Nvidia CEO Jensen Huang at the CES trade show in Las Vegas on Monday. As investors prepare for a shortened trading week, they will be watching for key labor market data and Federal Open Market Committee (FOMC) meeting minutes.