Major United States benchmark indices closed higher on Monday (Tuesday AEST), with the Dow Jones Industrial Average notching a fresh record high as investors piled into artificial intelligence-linked chip stocks ahead of what is expected to be a strong second-quarter earnings season.
The Dow Jones Industrial Average gained 155.8 points, or 0.3%, to a record 53,055.9. The S&P 500 advanced 54.2 points, or 0.7%, to 7,537.4, while the Nasdaq Composite climbed 288.2 points, or 1.1%, to 26,121.2.
Chipmakers led the gains after Broadcom rose 3.7% on news it had extended its custom chip development and supply agreement with Apple through 2031.
Microsoft slipped 1% after the technology giant announced plans to cut about 2.1% of its workforce, or roughly 4,800 jobs.
SpaceX fell 1% despite more than US$26 billion worth of shares changing hands, with most of the trading occurring in the final seconds of the session.
Elon Musk's rocket and artificial intelligence company is set to join the Nasdaq 100 on Tuesday.
Adding to enthusiasm for AI-related chipmakers, South Korea's SK Hynix is scheduled to debut on the Nasdaq later this week.
Elsewhere, O'Reilly Automotive tumbled 6.7% after Bloomberg News reported the auto parts retailer had submitted a cash offer to acquire Genuine Parts.
Shares of Genuine Parts fell 3%.
On the economic front, the Institute for Supply Management (ISM)said its non-manufacturing purchasing managers' index (PMI) edged down to 54.0 in June from 54.5 in May, in line with market expectations.
Investor attention is now shifting to the second-quarter earnings season, with expectations remaining elevated.
According to FactSet Earnings Insight, S&P 500 companies are expected to deliver year-on-year earnings growth of 23.3% for the second quarter.
If realised, it would mark the second consecutive quarter in which earnings growth has exceeded 20%.
PepsiCo and Delta Air Lines are among the major companies scheduled to report results later this week.
Following last week's softer-than-expected U.S. jobs report, traders are pricing in a 25.7% chance of a 25-basis-point interest rate increase at the Federal Reserve's July 29 meeting, according to the CME Group FedWatch Tool.
Expectations for further policy tightening had increased following last month's Federal Reserve meeting, the first chaired by Kevin Warsh. Investors will look to the meeting minutes, due on Wednesday (Thursday AEST), for further guidance on the policy outlook.
On the bond markets, the yield on the 10-year US Treasury note slipped 0.3% to 4.471%, while the two-year Treasury yield fell 0.6% to 4.112%.
