(Bloomberg) — Stocks kicked off the week with gains as traders snapped up battered tech shares, while signs that President Donald Trump’s tariffs will be more targeted than anticipated reduced the appetite for safety. Bonds fell. The dollar and gold barely budged.
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Not even data showing a drop in US factory activity curbed Wall Street’s risk-on bid. Tesla Inc. led gains in megacaps, following a selloff that put the cohort of tech giants on track for their worst quarter since June 2022. A gauge of chipmakers climbed about 3% despite news that Jack Ma-backed Ant Group Co. used Chinese-made semiconductors to develop techniques for training AI models that would cut costs by 20%. That’s a stark contrast to a January rout sparked by Deepseek’s cheap model.
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“Stocks look to continue to rally from oversold levels, and any reduction in potential tariff impacts will be an upward catalyst,” said Ivan Feinseth at Tigress Financial Partners. “I believe we have seen the worst of the market’s pullback, though we will continue to see increased volatility at the beginning of next month based on the outcome of President Trump’s tariff policies.”
A weaker dollar will improve the earnings outlook for US stocks, potentially turning around the massive rotation that’s been underway in global markets since start of the year, according to Morgan Stanley strategists including Michael Wilson.
“Relative performance versus international developed equities can swing back in favor of the US,” they said. A weaker dollar “should offer a tailwind for US revisions,” driving capital back to the US, they said.
The S&P 500 rose 1.5%. The Nasdaq 100 climbed 1.8%. The Dow Jones Industrial Average added 1.2%. A gauge of the Magnificent Seven megacaps gained 2.5%. The Russell 2000 advanced 1.8%.
The yield on 10-year Treasuries rose seven basis points to 4.31%. The dollar was little changed.
Some of the main moves in markets:
Stocks
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The S&P 500 rose 1.5% as of 9:47 a.m. New York time
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The Nasdaq 100 rose 1.8%
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The Dow Jones Industrial Average rose 1.2%
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The Stoxx Europe 600 was little changed
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The MSCI World Index rose 1.1%
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Bloomberg Magnificent 7 Total Return Index rose 2.5%
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Philadelphia Stock Exchange Semiconductor Index rose 2.8%
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The Russell 2000 Index rose 1.8%
