S&P 500 dips 0.2% as AI stocks claw back losses; AMD up 1.6% after Helios deal

Wall Street closed mixed on Monday, with the S&P 500 dipping 0.2% and the Dow Jones Industrial Average shedding 307 points (0.6%) as a partial recovery in AI-related chip stocks offset broader market weakness. The Nasdaq composite was virtually flat, slipping less than 0.1%. The session saw choppy, intraday swings—at one point the S&P 500 was up 0.6% and the Nasdaq up 1%—before paring gains, reflecting fragile conviction around AI winners. Nvidia, the bellwether of the AI trade, edged up 0.2% after a sharp Friday sell-off during which it was the heaviest weight on the S&P 500. Sandisk climbed 2.7%, clawing back a fraction of the 29% it lost the prior week. Advanced Micro Devices rose 1.6% after unveiling an expanded collaboration with Microsoft that will incorporate its new Helios AI product beginning in the second half of 2026. The tepid advance underscores the market's ongoing reckoning with the artificial intelligence boom. For weeks, AI and semiconductor stocks have been under pressure as investors question whether valuations outpaced fundamentals. The rally that carried the S&P 500 to near-record levels has been powered in large part by massive capital expenditures on AI infrastructure. Companies are pouring billions into chips and data centers, generating tens of billions in revenue for suppliers like Nvidia and AMD. Yet the sustainability of that spending cycle hinges on whether AI delivers the promised leaps in productivity and profit. Monday's price action reflected hope that the worst of the correction may be over, but caution is dominating ahead of a critical earnings catalyst. On Wednesday, Alphabet will report quarterly results, offering one of the first concrete reads on how AI spending is translating into financial performance for the hyperscale cloud providers that are the largest customers for AI chips. Analysts will scrutinize Alphabet's cloud revenue growth, margins, and any commentary on AI monetization. A miss or cautious guidance could reignite the rotation out of high-valuation tech names. Beyond tech, the broader earnings season is also set to test market valuations. Indexes remain near all-time highs, with the S&P 500 having posted its first losing week in three. The recent shakiness in AI names has not yet derailed the overall market, but a sustained sell-off could trigger broader declines given the sector's outsized weighting. Elsewhere, strong consumer-facing results provided a counterbalance: AMC Entertainment soared 26.8% after beating revenue expectations, while Domino's Pizza rose 2.1% on improving spring demand. These moves highlight a market in which investors are balancing AI-driven growth narratives with tangible earnings from traditional industries. Looking ahead, the interplay between tech earnings and macro data will be crucial. While no major economic releases are slated for Monday, the week's reports on durable goods and consumer sentiment could influence rate expectations. The Federal Reserve's tone on inflation and growth remains a background factor, but for now the immediate focus is on whether the AI spending engine can deliver on its lofty promises. The next two weeks of earnings from megacap tech—Alphabet, Microsoft, Meta, and Amazon—will likely determine the near-term direction for both the AI sector and the broader market.