Rebounding mega-cap chip stocks lifted US equities, with dip buyers stepping in.

The market is betting that the artificial intelligence trade driving this bull market still has room to run.

At 9:31 New York time, the S&P 500 rose 0.3%, the Nasdaq 100 gained 0.6%, and the Dow advanced 0.2%. An index tracking major semiconductor companies climbed 1.5%.

A report that OpenAI expects annualized revenue to reach or exceed $70 billion by the end of this year boosted sentiment.

US stocks have repeatedly set new highs this year, partly fueled by bets on artificial intelligence. But market volatility has picked up again recently.

As competition intensifies and investors question whether massive AI investments can deliver sufficient returns, the sector has seen occasional sharp selloffs.

That also puts the AI sector under greater scrutiny, because market expectations are already very high and leave little room for earnings disappointments.

Christian Mueller-Glissman of Goldman Sachs Group Inc (NYSE: GS) said in an interview: "People are worried, and that is not a sign of a bubble." He added: "Overall, we still think AI-related earnings growth is continuing to materialize."

With the US stock bull market about to mark its fourth anniversary, the market shows few obvious signs of stress. Corporate earnings remain solid, and the S&P 500 is hovering near a record high.

According to CFRA data, the S&P 500 has risen 117% since 2022, the third-largest gain among bull markets of comparable duration in data going back to 1947.

CFRA data shows that when a bull market extends into its fifth year, the historical average gain is 21%.

In theory, that means this rally still has considerable room to broaden further, rather than remaining concentrated in the mega-cap technology stocks that have contributed most of the gains since October 2022.