AI stock rebound lifts US indexes, Dow breaks 53,000

A sharp rebound in artificial intelligence stocks on Monday lifted major U.S. indexes, interrupting a recent selloff that had raised concerns about the sustainability of the market's dominant theme. The tech-heavy Nasdaq Composite rose 1.1%, while the S&P 500 gained 0.7%. The Dow Jones Industrial Average added 0.3%, closing above 53,000 for the first time.

The rally followed a period of significant volatility for AI-related shares in the two weeks leading into the July 4 holiday. During that stretch, the Nasdaq 100 dropped more than 4% from mid-June highs, with individual stocks like Micron Technology, Seagate Technology, and SanDisk tumbling between 14% and 20%. The selloff prompted headlines comparing the market environment to the dot-com bubble of 1999.

However, market analysts attributed the recent weakness largely to routine portfolio repositioning by institutional investors at the start of a new half-year, rather than a fundamental deterioration in the AI story. According to veteran portfolio managers, the hardest-hit stocks were among the biggest winners of the first half, making them natural candidates for profit-taking and rebalancing before a holiday weekend. The...