U.S. equities rebounded on Thursday, with the S&P 500 climbing 0.8%, the Nasdaq composite rising 1.3%, and the Dow Jones Industrial Average adding 0.3%. This surge was largely led by the semiconductor sector, which benefited from strong institutional demand for SK Hynix's upcoming U.S. initial public offering and an increased investment announcement from Micron Technology.
A significant driver was the overwhelming interest in South Korean chipmaker SK Hynix's American Depositary Receipt (ADR) offering, which is set to raise approximately $26.5 billion. This deal could become the largest U.S. IPO by a foreign company, surpassing Alibaba's debut. The offering attracted nearly $200 billion in total demand from over 500 accounts and was oversubscribed by more than seven times, indicating strong confidence in the AI memory supercycle. The Philadelphia Semiconductor Index surged 3.1%, outperforming the Nasdaq 100 which gained 1.6%.
Micron Technology also contributed to the sector's gains, jumping 7.5% after announcing an expanded plan to invest over $250 billion in the U.S. through 2035, an increase from its prior $200 billion plan. This investment will support a major semiconductor campus in New York and expansions in Idaho and Virginia, creating over 90,000 jobs. Micron also plans to spend $3 billion to strengthen the U.S. semiconductor supply chain, including $500 million for GlobalWafers' silicon wafer facility in Texas.
Investors largely shrugged off geopolitical tensions in the Middle East, which had caused oil prices to briefly top the $80 mark the previous day. Brent crude fell 2.2% to $76.30 a barrel. The focus shifted to the upcoming earnings season, with analysts expecting S&P 500 earnings to increase 24% year-over-year, largely driven by technology companies. Stable jobless claims also signaled labor market resilience, while expectations of a Federal Reserve rate hike by December persisted.
Analysts like Matt Maley from Miller Tabak noted that investors are much more focused on earnings than geopolitical developments. Anthony Saglimbene at Ameriprise added that companies will need to demonstrate strong margins, firm guidance, and broad tech-led profit growth to justify market valuations. The S&P 500 is currently trading at about 20 times expected earnings, down from 21 a month ago.
