U.S. equities rebounded Tuesday, ending a three-session losing streak, with the Dow Jones Industrial Average up 0.74%, the S&P 500 up 0.89%, and the Nasdaq Composite gaining 1.29%. The move was led by technology shares, especially semiconductors and AI hardware names, after some of the market’s hardest-hit momentum stocks bounced sharply. Still, the broader tone stayed cautious. BTIG strategist Jonathan Krinsky said the advance looked less convincing beneath the surface because market breadth remained weak and trading volume was light. Goldman Sachs noted that high-volatility tech stocks had fallen as much as 33% in a short period, leaving the group deeply oversold and vulnerable to short covering. Goldman and UBS said the momentum selloff may be nearing its end, while BTIG argued the rebound was approaching resistance. At the same time, rising geopolitical tension between the U.S. and Iran pushed Brent crude back above $91 a barrel and WTI above $85, reviving inflation concerns and sending Treasury yields higher. In equities, memory-chip names led the surge: Micron rose 12.17%, SanDisk 14.27%, SK Hynix 13.75%, Western Digital 12.51%, and Seagate 11.14%. Investors also tracked tariff signals from Washington, upcoming earnings from Tesla and Google, and a major share lockup event approaching for SpaceX.

U.S. technology momentum stocks staged a violent rebound on Tuesday, July 21, with Morgan Stanley’s TMT momentum factor jumping more than 12% in its biggest one-day gain on record, beating any single-session rise seen during the 2000 dot-com era. Goldman Sachs’ high-beta momentum long index rose about 8.5%, its strongest daily performance since April 2025, while its long-short high-beta momentum index climbed 9.5%, the best since 2021 and near historical highs going back to 2003. The Nasdaq Composite gained about 1.3%, led by semiconductors, as the Philadelphia Semiconductor Index rose 4.6% and the VanEck Semiconductor ETF added roughly 4.5%. The rebound followed a three-day slide and came after momentum stocks had fallen 33% in just a handful of sessions. Analysts pointed to short covering as a major driver, especially after losses hit traders in Korea and Japan and margin calls surfaced in Korea. Still, several desks said the internal picture remained weak. BTIG highlighted light volume, poor breadth and major resistance levels, while Bloomberg’s Michael Ball said it was too early to call the correction over. Goldman Sachs and UBS took a different view, arguing the momentum washout was in its late stage and that investors could start rebuilding exposure gradually. Earnings this week, Treasury yields, oil prices and broader macro conditions remain central to what happens next.

BTIG chief market technician Jonathan Krinsky said the biggest risk for markets is not a single negative headline, but a change in investor conviction around the market narrative that had previously been taken for granted. He pointed to a roughly 20% drop in the Philadelphia Semiconductor Index from its June high, putting it in bear market territory, while South Korea’s KOSPI has fallen more than 25% and Japan’s Nikkei 225 has entered a technical correction. In his view, those moves show that global technology stocks are under pressure. Krinsky said US equities could be at risk of a sharp pullback similar to the one seen in the summer of 2024, with the S&P 500 facing the possibility of breaking below its 200-day moving average at 6,983. If that happens, semiconductor shares could weaken further and the “Magnificent Seven” could lose their leadership role, weighing on the broader market. He added that one of the more troubling aspects of the selloff is the lack of a clear catalyst, even as investors point to concerns over chip-sector gains earlier this year, heavy borrowing tied to large capital spending plans by major tech companies, and uncertainty in the economic backdrop under the Federal Reserve’s new policy setting.

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