US stock markets opened higher on Monday evening, Beijing time. The major indices continued the positive momentum established last week. Market attention remains focused on the recent sector rotation trend. The Federal Reserve is set to release the minutes from its June monetary policy meeting this week.
The Dow Jones Industrial Average rose by 96.82 points, or 0.18%, to 52,996.89. The Nasdaq Composite climbed 199.84 points, or 0.77%, to 26,032.51. The S&P 500 index gained 33.04 points, or 0.44%, reaching 7,516.28.
Technology stocks broadly advanced. The State Street Technology Select Sector SPDR Fund (XLK) rose more than 1%, with Western Digital up 3% and Teradyne surging 4%. Marvell Technology and Oracle also posted gains exceeding 3% and 2%, respectively.
US stocks performed strongly last week, with the Dow rising nearly 2%, coming within a whisker of the never-before-touched 53,000-point mark. The S&P 500 and Nasdaq Composite also posted significant weekly gains, rising 1.8% and 2.1%, respectively.
Despite the overall market gains, the chip sector, a primary driver of this year's rally, showed weakness last week as investors reduced exposure to chipmakers and rotated into other sectors. The VanEck Semiconductor ETF (SMH) fell 3.2%, marking its second consecutive weekly decline.
Even with the rebound in tech shares, the market's focus remains on the persistent sector rotation. Financial, healthcare, and industrial sectors all closed at weekly record highs last week, effectively offsetting the consolidation pressure in the semiconductor space. Analysts note that investors are reassessing the high valuations of AI-related stocks and gradually shifting funds towards sectors with more attractive valuations and clearer earnings visibility. Some analysts have drawn parallels between current market conditions and historical bubble periods, suggesting investor skepticism over tech stock valuations may persist.
Mark Newton, Head of Technical Strategy at Fundstrat, stated: "The broadening of the rotation is a big positive, with financials, healthcare, and industrials all closing at weekly record highs this week, enough to offset the consolidation in semiconductors. While the decline in semiconductors is a short-term headwind and more beneficial for holding other sectors during its stabilization period, it has not damaged the overall indices."
Newton expects the S&P 500 to reach 8,000 by mid-August. The benchmark index closed last week at 7,483.24, approximately 7% below the 8,000-point level.
Another key event for the market this week is the release of the Federal Reserve's June meeting minutes. This meeting was the first interest rate decision chaired by the new Chair, Kevin Warsh, and the minutes are scheduled for release on Wednesday. Investors will scour the minutes for the latest assessment from policymakers on the inflationary impact of rising energy prices and for clues about any disagreements among officials.
On the individual stock front, South Korean chipmaker SK Hynix is initiating its US listing process this week, planning to raise approximately $28 billion, which will serve as a key gauge of market interest in AI-related companies. SpaceX is set to be formally added to the Nasdaq 100 index on Tuesday, with its pre-market shares rising about 1.7%.
In the commodity markets, oil prices remain under pressure. Brent crude futures fell 0.5% to $71.76 per barrel, hovering near a four-month low, primarily influenced by the OPEC+ decision to increase production and the continued recovery of shipping traffic through the Strait of Hormuz.
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