* Indexes up: Dow 0.2%, S&P 500 0.6%, Nasdaq 0.9%

* Domino's Pizza gains after Q2 revenue beat

* Alphabet rises after report co building new AI chips

* Alphabet, Tesla and Intel ( INTC ) to report earnings later in the

week

(Updates after markets open)

By Ragini Mathur and Avinash P

July 20 (Reuters) - Wall Street's main indexes rose on

Monday, led by recovering chip stocks, while investors awaited a

key slate of earnings from major technology companies that have

powered the market's AI-driven rally.

The second-quarter earnings season will pick up pace later

this week, with reports due from several major companies,

including Alphabet, Tesla, Intel ( INTC ) and

IBM ( IBM ).

Investors will closely watch earnings from Intel ( INTC ) and Texas

Instruments ( TXN ) for signals on whether the semiconductor

sector can regain momentum after a sharp pullback.

A surge in AI capital spending by hyperscalers has been a

major driver behind this year's market gains, lifting chip

stocks and other companies that are seen as the beneficiaries of

the buildout, and helping Wall Street climb to record levels.

But last week's selloff raised concerns that the rally had

run too far.

The Philadelphia SE Semiconductor Index ended Friday

more than 20% below its late-June record high, confirming a

bear-market decline. The gauge was up 2.5% on Monday.

"There's just a little less room for error in the market at

this point. Any sort of events or earnings news could probably

move the market down," said Jack Herr, senior investment analyst

at GuideStone Funds.

"As we move into the second half of the year, market

expectations are higher than they were before."

Markets are expecting S&P 500 earnings growth of 26% for the

second quarter, year-on-year, up from an earlier estimate of

23.7%, according to data compiled by LSEG.

At 09:50 a.m. ET, the Dow Jones Industrial Average

rose 78.39 points, or 0.15%, to 52,224.81, the S&P 500

gained 44.81 points, or 0.60%, to 7,502.50 and the Nasdaq

Composite gained 234.45 points, or 0.92%, to 25,754.69.

Micron Technology ( MU ) and SanDisk ( SNDK ) were up 5.1%

and 5.4%, respectively, and leading gains among chipmakers.

Meanwhile, Alphabet added 3.4% after a report said the

Google-parent is developing new chips to run its AI models.

The information technology and communication

services sector were leading gains on the benchmark

S&P 500.

Last week's declines in major U.S. indexes came despite

benign inflation data that eased some concerns about a Federal

Reserve rate increase this month, and a solid start to

second-quarter earnings season from major U.S. banks.

Markets are pricing in about a 15% chance of a quarter-point

rate hike at the Fed's July meeting, according to CME's FedWatch

tool.

Investors were closely watching the developments in the

U.S.-Israeli war with Iran after a recent escalation in the

nearly five-month-old conflict stoked inflation fears.

Yemen's Iran-aligned Houthis said they were imposing a naval

blockade on Saudi Arabia, a move that opens a new front in the

Middle East war and increases the threat to global energy

supplies and trade.

Among other movers, Domino's Pizza gained 3.6% after

the pizza chain's quarterly revenue edged past Wall Street

estimates.

Advancing issues outnumbered decliners by a 1.14-to-1 ratio

on the NYSE and by a 1.11-to-1 ratio on the Nasdaq.

The S&P 500 posted eight new 52-week highs and one new low,

while the Nasdaq Composite recorded 31 new highs and 55 new

lows.