The Nasdaq rose about 0.6% in early trading in New York, outpacing the S&P 500, which gained 0.3%, and the Dow Jones Industrial Average, which was close to flat.
Nvidia, the AI chipmaker, rose 0.5% to $217.06 after saying it would invest $3 billion in Meta Platforms, the owner of Facebook and Instagram, which is raising up to $95 billion for its data centre build-out.
Nvidia will also work with Meta on Muse, Meta's family of AI models, to improve training and inference performance.
The rebound follows a rough month for the sector. Chip stocks have been sold heavily in October, and the S&P 500's equal-weighted version, which gives smaller companies the same weight as Nvidia, has pulled well ahead of the cap-weighted index.
On Monday, 57 of the 60 stocks in a Yahoo Finance semiconductor basket rose, though that barely dented the month's losses.
Sentiment also improved after Anthropic filed its IPO prospectus publicly on Monday. In Asia, South Korea's KOSPI index gained 3.09% as chip stocks recovered.
Attention now turns to Wednesday, when Alphabet and Microsoft report third-quarter results, and to the Federal Reserve's rate decision the same day, with investors pricing in only a 10% chance of a hike.
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