Nasdaq 100: Intel Drives Tech Stocks as SOXX Hits Record High, Oil Falls

Stocks Rally as Apple-Intel Chip Talks Rock the Semiconductor Space

A little after mid-session Tuesday, the S&P 500 is up 0.80% at 7,258, the Nasdaq Composite is gaining 0.92% at 25,297 and the Dow Jones Industrial Average is adding 285 points, or 0.58%, at 49,226. Ten out of eleven S&P 500 sectors are in the green. Oil pulled back and a Bloomberg report dropped Intel’s name into the Apple chip conversation. That’s what’s driving this market Tuesday.

Apple Is Shopping, Intel Is Running

Bloomberg reported Apple executives visited a Samsung plant under construction in Texas and held early-stage talks with Intel about producing the main processors for Apple devices. No orders placed. Nothing set in stone. Intel is up 12.3% on the session anyway. That’s what happens when a company that has been fighting to rebuild its foundry reputation suddenly gets connected to the biggest consumer electronics brand in the world. The market doesn’t wait for a signed contract.

The Philadelphia Semiconductor Index hit an all-time high Tuesday, up 4.2%. AMD added 3.2% ahead of earnings after the bell. The S&P 500 technology sector is up 1.5% and also scored a record. The whole chip space is running on this one headline and I’ve seen this before. One credible report that Apple is looking at alternatives to Taiwan Semiconductor Manufacturing Company and every name in the sector reprices immediately.

Now here’s the part of this story I keep coming back to. Apple moving away from Taiwan Semiconductor Manufacturing Company is not simple and it’s not fast. Reliability and scale are the two things no other manufacturer has matched.

Former CEO Tim Cook flagged last quarter that iPhone sales were held back by a shortage of advanced processor chips. The iPhone 17 family runs on the same Taiwan Semiconductor Manufacturing Company manufacturing node that powers most of the leading AI chips on the market right now. That’s not a process you hand off to a new supplier in a year. Apple is starting a conversation, not placing an order. Traders are pricing in the possibility. The reality is further out than the stock move suggests.

Iran Fears Cool, Oil Pulls Back

Monday the Dow dropped 557 points after the UAE intercepted Iranian missiles and June WTI crude oil spiked 4.4% to $106.42. Spot Brent crude added 5.8% to $114.44. That was the fear trade in full force. Tuesday Washington confirmed the ceasefire is still holding and Spot Brent crude dropped 3.5%. Still above $110 a barrel, which doesn’t leave the inflation picture quietly, but the acute fear came off and equities followed immediately.

I want to be clear about something. Oil above $110 doesn’t go away just because headlines calm down for a session. The Strait of Hormuz situation hasn’t been resolved. The supply math hasn’t changed. What changed Tuesday is that traders exhaled. That’s a different thing from the risk being gone.

Earnings Driving the Winners

Archer-Daniels-Midland jumped 5.6% after beating first-quarter profit estimates on stronger margins. DuPont climbed 8.5% after raising its full-year profit outlook. Pinterest popped 9.2% after guiding for second-quarter revenue above what analysts were looking for. Those aren’t the same kind of headline as an Apple-Intel rumor, but they matter. Broad earnings strength gives bulls a reason to stay in at these levels.

Economic Data

Job openings came in at 6.866 million for March, slightly above estimates. The labor market is not cracking and the Fed knows it. Higher-for-longer stays on the table. That’s the ceiling on this rally and it’s not going anywhere.

Technical Outlook

Technically, the Nasdaq Composite main trend is up, but the distance from new high to new high is shrinking, suggesting investors may be taking profits on new records. Buyers could also be getting more cautious at current price levels.

The support is made up of a series of higher pivots and higher swing bottoms. That’s still a bullish pattern so what we’re looking for is a break in that pattern. Breaking the pivots will mean scarcity of buyers on dips, but taking out minor bottoms will indicate shifting momentum.

The granddaddy of all topping patterns is the closing price reversal top in my opinion. So start watching for it after every new top. Breaking a pivot will indicate buyers are respecting the dip. Taking out a minor bottom like 24913.12 will shift momentum to the downside. A failure at the 24199.00 main bottom changes the trend.

If I was going to make an early downside target prediction, I would zero in on the 50-day/200-day moving average cluster at 23022.70 and 22751.89, respectively, along with 50% of the 20690.25 to 25335.40 trading range.

What to Watch

AMD reports after the bell. The Street is looking for $9.88 billion in revenue and $1.27 adjusted earnings per share, both up roughly 33% year over year. A beat keeps semiconductor momentum going. Guidance is the number I’m watching. One cautious line on AI demand and this sector has a reason to give back some of Tuesday’s move in a hurry.

More Information in our Economic Calendar.