Key keywords: S&P 500, chipmakers two-day gain, semiconductor stock rally, US equity market, AI chip demand, Fed rate cut expectations, tech sector performance, semiconductor industry outlook The S&P 500 notched its third consecutive winning session in mid-week trading, climbing 0.87% to close at 5,246, as semiconductor stocks led the broader market higher and are on track to post their strongest two-day performance in the past 30 days. The PHLX Semiconductor Index (SOX), a benchmark for the US chip sector, rose 2.1% on Wednesday following a 2.3% gain in the previous session, putting its two-day cumulative advance at 4.4% – a mark last seen in mid-March 2024. Leading the chip rally were top AI chipmaker NVIDIA, which gained 3.2% to hit $893 per share, as investors reacted to reports that the company is ramping up production of its next-generation H200 AI chips to meet unmet global demand. Advanced Micro Devices (AMD) closed 4.1% higher after its management confirmed that shipments of its MI300 series AI accelerators are running 30% above initial forecasts for the first quarter of 2024. Memory chip maker Micron Technology added 2.8%, while Taiwan Semiconductor Manufacturing Company’s (TSMC) US ADR rose 1.9% on news that it has received new orders for 3nm chips from multiple US tech giants for their 2024 product lines. Multiple factors are driving the dual rally in the S&P 500 and semiconductor stocks. First, newly released Federal Reserve meeting minutes confirmed that central bank officials remain on track to deliver three 25-basis-point interest rate cuts in 2024, easing investor concerns that persistent inflation would delay monetary policy easing. Lower interest rates typically boost valuations of high-growth tech and semiconductor stocks, which rely on cheap capital to fund expansion and R&D. Second, industry data from the World Semiconductor Trade Statistics (WSTS) organization shows that global semiconductor sales rose 12.4% year-over-year in February 2024, marking the sixth consecutive month of year-over-year growth and confirming that the sector has fully exited its 2023 downturn. WSTS now projects full-year 2024 semiconductor market growth of 13.1%, driven primarily by a 35% jump in AI-related chip sales. Analysts from Morgan Stanley noted in a research note published Wednesday that the recent 7% pullback in the SOX index over the first two weeks of April was a "healthy correction" rather than the start of a broader downturn, citing unrelenting demand for AI infrastructure from cloud providers, enterprise customers, and government agencies. The S&P 500’s gain was also supported by solid performances in the consumer discretionary and financial sectors, but tech stocks contributed nearly 60% of the index’s total daily advance, highlighting the outsize role of the chip sector in driving current market momentum. Market watchers now expect the SOX to hit a new all-time high by the end of the second quarter if chipmakers deliver positive earnings beats in their upcoming quarterly reports.