S&P 500: Strong gains follow tech recovery – Deutsche Bank

US equities rebounded sharply and the VIX measure of volatility dropped steeply, with Deutsche Bank’s Jim Reid noting that the S&P 500 recorded its strongest session since April’s Iran ceasefire announcement. AI-related stocks and semiconductor shares led the gains after positioning had shifted to underweight. Nearly all of the index’s post-midterm losses have now been recouped.

How are AI and semiconductor stocks driving the equity rally?

"Markets have put in a very strong performance over the last 24 hours, with all the main risk factors fading into the background."

"So in turn, that meant the S&P 500 (+2.35%) built on Friday’s recovery and posted its strongest day since the Iran ceasefire announcement in April."

"The index is now "only" down -0.25% in the four business days since the midterms."

"This strength was clearest in the most AI-exposed assets, which continued to recover from last Thursday’s slump."

"So all round, investors became a lot more optimistic on the near-term outlook, and the VIX index (-5.72pts) posted its sharpest daily decline since April 2025 when equities rebounded from their post-Liberation Day sell-off."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)