Stocks generally rose, driven by a rebound in chipmakers and AI-infrastructure companies, with the Nasdaq 100 gaining nearly 1%. The iShares Semiconductor ETF (SOXX) was up +2%, and individual chip stocks like Western Digital (+4%), Intel (+3%), and Advanced Micro Devices (+3%) saw significant increases. This rally followed a period of "AI bubble anxieties" but was fueled by anticipation of strong second-quarter earnings, with Bloomberg Intelligence forecasting a +23% increase, largely due to AI spending.
The S&P 500 halted a back-to-back decline, advancing +0.65% to 7,505.82, and the Dow Jones Industrial Average gained +0.37% to 52,340.61. Alphabet Inc. notably advanced over +3% after reports that it is developing a new server chip optimized for its Gemini AI model. Iren Ltd also saw a substantial rise, up over +17%, after significantly increasing its year-end AI-cloud revenue estimate to over $4 billion.
Oil prices, initially climbing due to escalating tensions between the US and Iran and concerns about Strait of Hormuz traffic, later pared gains. Brent crude fluctuated below $88 a barrel, while US West Texas Intermediate crude hovered around $82 a barrel. The de-escalation of oil prices was attributed to diplomatic efforts, with Iran indicating a willingness to pursue negotiation and mediators proposing a 10-day cessation of strikes.
Market sentiment also factored in the upcoming second-quarter earnings season, with results expected from major companies like Alphabet, Tesla, IBM, and Intel. Investors are also looking ahead to the Federal Open Market Committee (FOMC) meeting next week, where policymakers are widely expected to keep interest rates steady, with a 14% chance of a +25 bp rate hike being discounted for the July 28-29 meeting. The rebound in chip stocks offered support, despite warnings from analysts about an "intermediate-term uptrend" disruption in the sector.
