Rhee: Recent stock gains led by chips, policy reforms
TL;DR
Recent U.S. stock gains, led by semiconductor and AI stocks like Nvidia, are driven by policy reforms such as the CHIPS Act and global initiatives. AI demand and economic resilience in consumer cyclicals also contributed, though risks like geopolitical tensions persist.
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Rhee: Recent stock gains led by chips, policy reforms
Recent Stock Gains Driven by Semiconductor Sector and Policy Reforms
The U.S. stock market saw broad gains on February 25, 2026, with the Nasdaq Composite rising 1.26% and the S&P 500 up 0.81%, led by strength in semiconductor and AI-infrastructure stocks. Nvidia (NVDA) emerged as a key catalyst, rallying ahead of its after-hours earnings report, which exceeded expectations and reinforced optimism about sustained AI demand. The company's performance underscored its role as a bellwether for the AI sector, with other chipmakers like Taiwan Semiconductor Manufacturing (TSM), Micron (MU), and Broadcom (AVGO) also posting gains.
The semiconductor sector's rally reflects broader industry tailwinds, including policy reforms such as the U.S. CHIPS and Science Act of 2022, which has spurred $39 billion in federal funding and incentivized private-sector investments to expand domestic manufacturing capacity. Global initiatives, including Europe's Chips Act and expanded programs in Taiwan, South Korea, and India, are further diversifying semiconductor production and addressing supply chain vulnerabilities. These efforts aim to counter geopolitical risks, such as U.S.-China trade tensions, and support the sector's projected growth through 2032.
AI-driven demand remains a critical growth driver. Companies like Nvidia, Broadcom, and ASML are benefiting from surging investments in AI infrastructure, with Bloomberg forecasting Nvidia's Q4 revenue at $65.91 billion. Meanwhile, consumer cyclicals such as Amazon (AMZN) and Tesla (TSLA) also contributed to market gains, reflecting confidence in economic resilience.
Investors remain cautious about sector-specific risks, including high manufacturing costs and geopolitical uncertainties, such as U.S.-Iran tensions. However, the semiconductor sector's resilience—bolstered by policy support and AI adoption—continues to attract capital. Exchange-traded funds like the VanEck Semiconductor ETF (SMH) and iShares Semiconductor ETF (SOXX) have seen renewed interest as proxies for the industry's long-term potential.
As earnings season nears its conclusion, market participants will closely watch tech leaders for further signals on AI's trajectory and its impact on broader equity markets.
