Chips Lead, Software Tags Along, and the S&P Grabs Another Record

Thursday delivered a solid green day that felt a little different. The S&P 500 closed at a fresh all-time high around 7,799, up roughly 0.7%. Nasdaq added about 0.8%, while the Dow managed a more modest gain. Softer-than-expected producer price inflation data cooled rate-hike fears, oil prices eased, and the usual late-summer chop gave way to steady buying.

The real story sat in semiconductors. Memory names ripped: Sandisk surged hard (double-digit gains in some reports), Micron climbed more than 4%, and the broader chip complex pushed the SOX higher by roughly 2%. Intel (INTC) stood out with a clean +4% move, finishing near the $105–106 area after the prior close around $101. That’s the kind of follow-through that gets swing traders’ attention after the recent chop in the group.

Even more interesting: software actually moved higher with the chips. Microsoft added nearly 1%, Meta climbed close to 3%, and names like Workday exploded on buyout chatter. That combination is rare. For most of the past year (and longer), chips and software have often traded as rivals for the same capital—AI hardware spending versus software monetization. When both advance together, it usually signals broader risk appetite rather than pure rotation. The AI infrastructure narrative remains intact, but the market is no longer treating every dollar spent on GPUs as a direct hit to software multiples.

What does this mean for the tape?

Breadth improved. Tech and industrials led, communication services participated, and the equal-weight S&P held up. This wasn’t another mega-cap-only melt-up.

Rate path still the governor. PPI coming in softer than expected pushed September hike odds lower. That helps the entire growth complex, but especially duration-sensitive software.

Chip leadership is broadening. Memory is finally catching some of the AI coattails that logic and foundry names have enjoyed. Intel’s move fits the “catch-up” pattern we’ve been watching—execution progress and valuation still matter here.

From a swing-trading perspective, the setup remains constructive as long as the S&P holds the recent breakout area and the SOX stays above its short-term support. The unusual software–chip correlation is a positive tell for overall market health. When the two stop fighting each other, the path of least resistance tends to stay higher—until the next inflation print or earnings miss resets the narrative.

Watch the usual suspects: any sudden spike in yields, oil reversing higher, or a soft print from a key AI supplier. Until then, the green day felt earned rather than forced.

See you on Discord in the morning.