Tech stocks led gains on Wall Street, with earnings for the most influential segment of the US equity market about to begin in a test of the S&P 500's 12% rise from its October low.

Microsoft and Intel are set to report results that will help shape the fate of a sector that faced a reckoning last year amid higher rates. While some traders are expecting the group's worst earnings slump since 2016, pessimism has recently faded as tech firms focus on cost cuts and inflation shows signs of easing — with the Nasdaq 100 posting its best two-day rally since November.

Spotify Technology, the latest notable company to announce job cuts to reduce expenses, rose on plans to lay off about 6% of its workforce. Surprisingly, despite the positive reaction to the industry's cost-cutting measures, not everyone believes this is a good sign. Bank of America strategists believe this could signal a drop in tech demand.

It's also worth noting that chipmakers were by far the best performers among all tech groups on Monday, thanks to a call from Barclays upgrading Advanced Micro Devices and Qualcomm, which prompted a 5% jump in the Philadelphia Semiconductor Index. The S&P 500 has crossed the 4,000 mark, which several technical analysts regard as a make-or-break level that could define the gauge's direction.

One thing to remember is that stocks aren't necessarily cheap at this point. Indeed, given that earnings estimates have been declining for some time, the S&P 500 may appear expensive in comparison to historical levels.