Chip Rally Powers Market Makers to Action as Semiconductor Boom Continues

The stock market is firing on all cylinders today, with major indices climbing across the board. The S&P 500 is up +0.32%, while the Nasdaq 100 surges +0.63% and the Dow Jones inches up +0.16%. Futures are following suit—March E-mini S&P 500 futures gained +0.33%, and March E-mini Nasdaq futures climbed +0.66%.

The Semiconductor Story Driving Today’s Gains

Today’s real action is in the chip sector, where semiconductor and data storage stocks are leading the charge. Market makers are actively facilitating flows in this space, as investors pile into names like Sandisk (+12%), which is heading the S&P 500 gainers list. Microchip Technology (+7%) topped Nasdaq movers after raising Q3 guidance to $1.19 billion, beating consensus expectations of $1.14 billion.

The semiconductor narrative is broad-based: NXP Semiconductors, Texas Instruments, and Qualcomm are all up over +4%, while Micron Technology, Lam Research, and Applied Materials are gaining +2% to +3%. This coordinated strength suggests institutional buying is flowing through multiple touchpoints in the chip supply chain.

Copper and Mining: New Records amid Tariff Speculation

Mining stocks are having their moment too, with copper hitting a fresh all-time high today. The metal gained over +1% as market participants price in potential tariff impacts. December US copper imports jumped to their highest level since July, reflecting inventory buildup ahead of possible policy shifts under the Trump administration.

Silver is up over +3%, and the mining sector reflects this optimism. Hecla Mining (+4%) and Freeport-McMoRan (+3%) lead the charge, while Newmont and Barrick Mining are both positive.

The Data Center Cooling Twist

Not all semiconductor adjacents are winning. Nvidia CEO Huang’s announcement that new Rubin chips can run on water-cooled systems without chillers has spooked the cooling equipment crowd. Modine Manufacturing plummeted -14%, Trane Technologies dropped -8%, and Johnson Controls fell -7%—all leading S&P 500 losers. This represents a sharp divergence between winners and losers, a reminder that even within bullish narratives, selective rotation is happening.

Global Markets Provide Tailwind

Strength isn’t isolated to the US. China’s Shanghai Composite rallied to a 10.5-year high and closed +1.50%, while Japan’s Nikkei hit a new record, up +1.32%. Europe’s Euro Stoxx 50 also climbed to all-time highs, up +0.06%. This global synchronized strength is providing carryover support to US equities.

The Inflation and Rate Question Looms

Bond yields are creeping higher, with the 10-year T-note yield up +2 bp to 4.18%. Rising inflation expectations—the 10-year breakeven inflation rate hit a 1-month high—are pushing yields. Richmond Fed President Tom Barkin took a hawkish tone, expecting tax cuts and deregulation to boost growth, while describing monetary policy as balanced. In contrast, Fed Governor Stephen Miran offered dovish commentary, suggesting over 100 basis points of rate cuts are justified this year.

The market is currently pricing just a 16% probability of a -25 bp rate cut at the FOMC’s January 27-28 meeting.

Individual Stock Stories Worth Watching

Beyond the chip narrative, several names grabbed attention:

Gainers: Aeva Technologies surged +32% after its 4D LiDAR tech was selected for Nvidia’s Drive Hyperion autonomous vehicle platform. OneStream jumped +25% on acquisition talks from buyout firm Hg. Oculis Holdings rose +11% after FDA breakthrough therapy designation. Zeta Global climbed +6% on a strategic OpenAI collaboration. Vistra Corp. gained +3% after securing $4 billion in natural gas power plant deals.

Losers: American International Group dropped -6% after CEO retirement news. Equifax and TransUnion both fell -5% after FHFA director criticized credit bureau pricing practices.

Economic Calendar: The Week Ahead

This week’s economic data will test market conviction:

Wednesday: Dec ADP employment (+48K expected), Dec ISM services PMI (52.3 expected), Nov JOLTS job openings (+9K to 7.679M expected), Oct factory orders (-1.1% m/m expected)

Thursday: Q3 nonfarm productivity (+4.7% expected), weekly unemployment claims (+12K to 211K expected)

Friday: The big one—Dec nonfarm payrolls (+59K), unemployment rate (4.5% expected), and University of Michigan Jan consumer sentiment (53.5 expected)

Global Cracks Emerging

Not everything is rosy. The Eurozone Dec S&P composite PMI came in weaker than expected at 51.5 (revised down from 51.9). German Dec CPI disappointed at +0.2% m/m versus +0.4% expected, though this helped support European bonds and provide spillover support to US Treasuries. The ECB is fully priced to hold rates at its February 5 meeting.

Today’s Dec S&P services PMI in the US also missed, revised down to 52.5 from 52.9—a warning sign about service sector momentum heading into year-end.

Bottom Line

Today’s market is a study in rotation: semiconductor strength is real and broad, mining is benefiting from commodity tailwinds, but cooling equipment is getting hammered. Global synchronized gains are providing support, but softening economic data and elevated inflation expectations are creating tension. The real test comes Friday with payroll data—whether the labor market remains resilient will dictate whether this rally can sustain.