Rebounding chip shares lead US stocks higher

Semiconductor shares were among the big winners Monday, rebounding from recent weakness as US stocks climbed ahead of major earnings and economic data later this week.

Nvidia, Broadcom and Texas Instruments were among the chip companies that rose more than two percent.

The Dow Jones Industrial Average finished up 0.3 percent at 40,415.44.

The broad-based S&P 500 gained 1.1 percent to 5,564.41, while the tech-rich Nasdaq Composite Index jumped 1.6 percent to 18,007.57.

Joe Biden's surprise announcement that he will not seek reelection dominated the news cycle, but analysts described the effect on the markets of Biden's exit and endorsement of Vice President Kamala Harris as muted.

Briefing.com analyst Patrick O'Hare said Monday's gains by chip companies and other technology equities amounted to a "buy the dip trade" after a recent pullback.

But O'Hare also characterized the gains by some large tech companies as a "little bit of a defensive-minded trade" given the headlines.

"We're in a period of heightened political uncertainty. And those stocks are generally looked at as being defensive outlets, given their industry-leading positions, their balance sheet strength, and their generally dependable earnings growth," O'Hare said.

Among individual companies Delta Air Lines slumped 3.6 percent as it continued to be plagued by a major IT outage connected to a flawed update to an antivirus program from American cybersecurity group CrowdStrike.

Delta canceled more than 820 flights on Monday, according to tracker FlightAware.

Crowdstrike also had a rough day, plummeting 13.5 percent amid worries of a reputational hit to the company.

Verizon tumbled 6.0 percent after confirming its full-year forecast but reporting second-quarter revenues a bit below analyst expectations.

This week's earnings calendar includes reports from Google parent Alphabet, General Motors and Coca-Cola, while the economic releases include personal consumption pricing data.