Stocks Rise as Investors Rotate Into Chip Stocks
Major indexes gained on Election Day after a three-session losing streak, while Apple shares slipped on a weaker margin outlook.
Updated on Nov. 3, 2026 in Economic Indicators
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The Nasdaq rose roughly 1% and the S&P 500 about half that on Tuesday, snapping three sessions of losses tied to selling in AI-related names. Apple shares fell about 2% after the company signaled disappointing gross margins.
Why it matters
Rotation back into semiconductor, power and electrical equipment stocks signals renewed investor appetite for AI-linked names. The moves come as Treasury yields rose on better-than-expected economic data, shaping borrowing costs across the U.S. economy.
The Nasdaq rose roughly 1% and the S&P 500 about half that on Tuesday, after both indexes posted three-session losing streaks. Better-than-expected JOLTS, factory orders and durable goods data were reported, though the stub does not provide their specific figures.
The players
Apple
Apple is the consumer electronics company whose shares fell after its disappointing gross margin outlook, a company that has been among the most valuable publicly traded firms in the world.
Micron
Micron is a major American manufacturer of memory chips whose rising costs are feeding into Apple's margin outlook.
Eaton
Eaton is a diversified power management company that posted strong quarterly results and raised its full-year outlook.
The details
Investors rotated back into semiconductors, power, electrical equipment and liquid cooling providers as bond prices fell and yields rose. Eaton posted strong quarterly results and raised its full-year outlook, while Apple's gross margin guidance reflected rising memory chip costs from Micron.
Timeline
Thursday (prior week): Apple shares closed at a record high.
Tuesday, November 3, 2026: Stocks rose on Election Day and Treasury yields rose.
Wednesday, November 4, 2026: Qnity Electronics and other companies report quarterly results.
Friday, November 6, 2026: The nonfarm payrolls report is released.
Market Dynamics
The rebound in semiconductor and power stocks reflects the continuing pull of the AI infrastructure buildout that has driven U.S. equity leadership in recent years. Analysts note open questions about how that buildout gets funded, and the midterm elections could act as a clearing event for the trade.
Investors with exposure to semiconductor, power and electrical equipment stocks saw renewed gains, while holders of Apple shares faced a pullback on weaker margin guidance. Rising Treasury yields also shift the cost of borrowing for mortgages and other loans that households carry.
The takeaway
Market leadership can rotate quickly even when the broader AI theme remains intact, so watching how yields and earnings guidance respond to economic data offers a clearer picture than any single day's index move.
What happens next
The nonfarm payrolls report is scheduled for Friday, November 6, 2026, and is widely viewed as the most important economic release of the week.
Further reading
Track the latest signals in the Economic Indicators section for context on how market moves like these connect to broader data.
Source note: This article includes information reported by CNBC.
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