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Chip stocks shifted from a major drag on Wall Street last week to a powerful source of support on Monday. The reversal lifted the major indexes even as most stocks across the broader market continued to lose ground.

A Yahoo Finance basket of 60 chip related stocks recovered nearly $250 billion in market value. The gains stretched across memory producers, chip designers, and equipment suppliers, giving the rebound considerable reach within the semiconductor industry.

Micron and Intel each gained more than 2%, while Sandisk climbed nearly 5%. AMD, Nvidia, and Western Digital also joined the advance, putting several familiar semiconductor names back among the market leaders.

Nearly 90% of the stocks in the chip basket were higher, according to Yahoo Finance calculations. That strength stood in sharp contrast with the S&P 500, where roughly 70% of stocks were falling.

The difference between the chip basket and the broader market showed how concentrated Monday’s strength had become. Chip shares were adding vast amounts of market value, but the average stock was not participating in the same recovery.

Another measure of market breadth sent a similar signal. The equal weight S&P 500 ETF, which trades under the ticker RSP, declined even as the main S&P 500 index moved higher.

That split showed how much the headline index depended on a relatively small collection of winners. Gains in heavily influential companies were strong enough to lift the main index despite widespread weakness beneath the surface.

Many buyers returned to stocks that had recently suffered steep losses. Micron dropped roughly 15% last week, while Sandisk lost about 18% as memory stocks entered another bear market.

Both Micron and Sandisk had previously helped drive the spring rally from the March lows as hopes for a ceasefire between the US and Iran improved. Their renewed gains on Monday restored some of that earlier leadership.

The same pattern appeared when Monday’s trading was compared with the market’s strongest performers from March 30 through June 2. That period represented the first large move higher after war headlines faded.

Among the 100 strongest S&P 500 performers during that stretch, 61 were rising Monday. Among the 100 weakest performers from the same period, 84 were falling, reinforcing the divide between former leaders and laggards.

Intel also received a fresh boost from Wall Street. JPMorgan upgraded the chipmaker to Neutral from Underweight, citing opportunities connected to artificial intelligence demand and chip scarcity, according to Yahoo Finance’s Brian Sozzi.

The upgrade gave Intel a company specific catalyst as the wider chip group recovered. Its gain of more than 2% placed it alongside Micron among the prominent names supporting Monday’s semiconductor rebound.

Elsewhere in artificial intelligence, investors gave the rebound a more skeptical reception. CoreWeave surrendered most of its premarket gains despite receiving an upgrade to Buy from Goldman Sachs.

The cloud provider’s financing needs had been a central issue during the previous week’s selling. Its fading advance contrasted with the broader strength among semiconductor companies and showed that enthusiasm was not spreading evenly across the artificial intelligence trade.

Semiconductor stocks also pulled back from their levels at the market open. Even so, the chip basket remained broadly positive, with nearly nine out of every 10 components advancing.

For chip bulls, the PHLX Semiconductor Index would ideally close above 11,500 during the session. The index also needed to hold the area between 11,000 and 11,100 to avoid a larger washout.

Monday’s action therefore delivered two very different market pictures. Chipmakers were staging a recovery worth nearly $250 billion, while declining shares still dominated the S&P 500 and the equal weight version of the index remained lower.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.