Nasdaq, S&P 500 end higher as chip, AI shares bounce

What happened

The Nasdaq and S&P 500 ended higher on Tuesday as chipmaker and AI shares bounced, with investors awaiting US midterm election results. Advanced Micro Devices rose more than 3% before its quarterly results, while Apple slipped 1.9% after warning of rising memory chip costs.

Confirmed

Global impact / market context

Rising memory chip costs pressure Apple's profit per sale, which means device makers may earn less on each unit sold. Meanwhile, chip and AI shares rising shows investors still favor companies tied to computing hardware and artificial intelligence even as election results remain unknown.

Analyst inference

A semiconductor index rose 2.6% and the S&P 500 technology sector gained 1.3%, while the Dow fell and materials stocks led decliners. Investors awaited midterm results, with some forecasts suggesting a divided Congress, a change from Republican control of both houses.

Analyst inference

What to watch

1. Advanced Micro Devices reports quarterly results after the closing bell, following a share rise of more than 3% during Tuesday's session, which investors will compare against the company's actual reported figures. Confirmed
2. Watch whether Apple's warning about rising memory chip costs leads other device makers to disclose similar cost pressure, which could signal broader pressure on hardware company profit per sale. Proposed
3. If midterm results produce a divided Congress as some forecasts suggest, that could limit new legislation affecting technology companies, shaping how investors position money in chip and AI shares. Analyst inference

Evidence

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