The Nasdaq is Rebounding on Monday. But Rising Oil Prices Still Threaten the AI Trade.

The Nasdaq rebounded on Monday as chip stocks led a cautious return to risk, helping futures recover after Friday's broad selloff. The tech-heavy index found support from semiconductors, reinforcing the AI-led rally even as the Dow drifted lower on rising energy costs. Renewed Middle East tensions underscored market caution, reminding investors that macro headlines still influence technology demand and valuation models.

Friday's session saw the Nasdaq fall more than four percent, with the Invesco QQQ Trust closing the week down about 4.5%. In early Monday trading, the fund was indicated higher by roughly 1.8% from its Friday close, signaling a relief bounce. Despite the retreat, the year-to-date gain for QQQ sits near 14.8%, illustrating resilience in AI-driven tech amid volatility.

The macro backdrop remains mixed. The May payrolls report registered 159,001 thousand in nonfarm payrolls, the highest reading in the series, supporting a durable labor market narrative. The 10-year Treasury yield hovered around 4.47%, maintaining high borrowing costs for data-center investments and AI infrastructure. Oil prices rose to the mid‑90s per barrel after new strikes in the region, fueling inflation concerns and complicating valuation math for growth names.