Wall Street’s record-setting start to the week ran into two familiar sources of volatility: the artificial intelligence trade and oil. The Dow Jones Industrial Average on Monday closed above 53,000 for the first time ever before renewed U.S.-Iran tensions erased those gains, leaving the blue-chip index down 0.5% for the week. Chip stocks — once the hottest corner of the market — also swung sharply as investors continued to question whether the AI trade had become overextended. Even so, the tech-heavy Nasdaq gained 1.74% for the week, while the S & P 500 rose 1.23%. Both indexes have finished higher in four of the past five weeks. Here’s a closer look at what drove the market last week. Chip stocks take investors for a wild ride Semiconductor stocks remained at the center of the market action. The group started the week strong, with the VanEck Semiconductor ETF rising about 2% on Monday as investors bought back into some of the biggest winners from the first half of the year. But the rally quickly faded Tuesday after Samsung’s results failed to impress investors and Reuters reported that China’s DeepSeek is developing its own AI chip. Micron , the Idaho-based rival to Samsung, fell 4.7%, while the VanEck Semiconductor ETF dropped almost 4%. The semiconductor trade stabilized Wednesday, helped by Apple’s announcement that it was expanding its longtime partnership with Broadcom in a multiyear deal expected to exceed $30 billion. Apple has historically tapped Broadcom for connectivity chips that help its devices connect to cellular, WiFi and Bluetooth networks. The new agreement calls for the production of more than 15 billion U.S.-made chips and includes a $1.5 billion expansion of Broadcom’s manufacturing facility in Fort Collins, Colorado. Broadcom shares climbed nearly 5% on the news Wednesday. It was the second Apple-Broadcom headline of the week. On Monday, Broadcom said in a securities filing that it agreed to supply Apple with “a range of custom ASIC silicon products for use in multiple generations of Apple products.” ASIC is short for application-specific integrated circuit — and that jibes with Bloomberg News has reported that Broadcom is working Apple on a specialized AI server chip for its data centers. That would be akin to Broadcom’s co-design relationship with Google on its in-house tensor processing units (TPUs). Broadcom was our second-best performer last week, up 10%. Amid the volatility, we used Wednesday’s rebound in AI and semiconductor stocks to exit our remaining position in Arm Holdings , locking in a gain of roughly 69% on shares purchased in April. While we don’t believe the AI buildout is nearing a peak, the trade has become shakier in recent weeks, and we didn’t want to risk giving back a fantastic gain in a stock prone to wild swings. We also wanted to reduce the portfolio’s overlap with the CPU renaissance theme, which our recent purchases of Intel provide. We’ll continue to follow Arm from the Bullpen and…
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