Nasdaq 100 futures rose 0.61%: led by semiconductor stocks, with the VanEck Semiconductor ETF (SMH) gaining 1.8%. Micron surged 3.4% and Sandisk climbed 2.4%.
U.S.-Iran tensions remain elevated: but crude futures stabilized after President Trump said Iran called to negotiate a potential deal. Brent crude rose 1.03% to $78.82/barrel, WTI rose 1.06% to $74.29.
SK Hynix's U.S. listing is 7x oversubscribed: ahead of its Friday debut, signaling massive investor demand for AI-related chip stocks.
European stocks rebounded: with the Stoxx 600 up 0.5%, while Japan's Nikkei 225 closed 1.4% higher and South Korea's Kospi rose 0.62%.
China's CPI rose 1% YoY: in June (below 1.1% forecast), while PPI accelerated to 4.1% — the strongest since July 2022.
AstraZeneca plunged 9%: after its heart drug Wainua failed a late-stage trial — worst day since March 2020.
The Dow tumbled Wednesday: amid the renewed Iran hostilities, but analysts at Wells Fargo maintained their S&P 500 year-end target of 7,800–8,000.
Why this matters: The tug-of-war between geopolitical risk and AI-driven tech momentum is defining current market conditions. Investors are navigating a landscape where oil supply disruptions threaten global growth, while semiconductor earnings and AI demand continue to fuel equity optimism.
The semiconductor sector emerged as the primary driver of Thursday's market rebound. The VanEck Semiconductor ETF (SMH) climbed 1.8%, with Micron surging 3.4% and Sandisk rising 2.4%. In Asia, SK Hynix shares closed 5.3% higher ahead of its highly anticipated U.S. debut on Friday — reportedly more than 7x oversubscribed, per Reuters. Japan's Kioxia surged as much as 11% after Bain Capital confirmed it had sold its entire stake, citing record-setting returns driven by AI demand.
European tech stocks followed suit, with ASML up 2.2%, BE Semiconductor rising 3.5%, and STMicroelectronics adding 4%.
The geopolitical backdrop remains volatile. The U.S. launched fresh strikes on Iran in response to attacks on commercial shipping in the Strait of Hormuz — one of the world's most critical energy chokepoints. However, crude futures stabilized after President Trump stated that Iran had called seeking a deal.
> *"Any assumption of a swift return to normalized Persian Gulf exports is certainly being challenged,"* said Mason Mendez, global real assets analyst at Wells Fargo Investment Institute. *"Given the reduced supply buffer of already low global reserves and inventories, any further escalations are likely to re-enforce a higher geopolitical risk premium in oil prices."*
Despite this, Mendez maintained that strong equity earnings momentum and AI strengths will likely drive the S&P 500 toward the year-end target range of 7,800 to 8,000.
AstraZeneca: plunged 9% after its heart drug Wainua failed to meet primary goals in a late-stage trial — its worst day since March 2020. Co-developer Ionis Pharmaceuticals fell 12.5% in premarket trading.
Levi Strauss: fell 4%+ despite an earnings beat ($0.28 vs $0.24 expected), as forward guidance disappointed.
PepsiCo: slipped 1% as Q2 earnings of $2.20/share missed the $2.21 consensus, with North American consumers spending less.
Luxshare Precision: (Apple's AirPods assembler) fell over 5% in its Hong Kong trading debut.
Asia-Pacific markets showed a mixed picture. Japan's Nikkei 225 closed 1.4% higher, while South Korea's Kospi surged 2.92% at open after entering a technical bear market the prior session. Australia's S&P/ASX 200 fell 0.26%. In Europe, the Stoxx 600 rose 0.5% with tech and mining stocks leading.
China's economic data revealed weakening consumer demand: CPI rose just 1% YoY (below 1.1% forecast), while PPI accelerated to 4.1% — its strongest since July 2022 — driven by elevated energy costs.
The 10-year Treasury yield held flat at 4.5732%, while the 30-year bond yield rose 1 basis point to hold above the key 5% level at 5.0773%, reflecting broader geopolitical risk pricing.
Why are tech stocks rallying despite U.S.-Iran tensions?
Semiconductor stocks are leading gains due to strong AI-driven demand, with SK Hynix's U.S. listing being 7x oversubscribed and chipmakers like Micron, ASML, and Tokyo Electron posting significant gains. Analysts at Wells Fargo note that strong equity earnings momentum and ongoing AI strengths continue to drive markets despite geopolitical risks.
How are U.S.-Iran tensions affecting oil prices?
Brent crude rose 1.03% to $78.82/barrel and WTI rose 1.06% to $74.29/barrel on Thursday, adding to Wednesday's 4% surge. The Strait of Hormuz — a critical energy chokepoint — is at risk of disruption, though President Trump said Iran called to negotiate a potential deal.
What happened with Levi Strauss and PepsiCo earnings?
Levi Strauss beat Q2 earnings expectations ($0.28 vs $0.24 expected) but shares fell 4%+ on weaker guidance. PepsiCo missed earnings estimates ($2.20 vs $2.21 expected) though revenue exceeded forecasts, with shares slipping 1% due to softer North American consumer spending.
What is SK Hynix's U.S. listing and why does it matter?
SK Hynix, the world's second-largest HBM chipmaker, is listing in the U.S. on Friday and is reportedly more than 7x oversubscribed. This reflects surging investor demand for semiconductor exposure amid the AI boom.
How did China's economic data fare in June?
China's CPI rose 1% year-on-year (below expectations of 1.1%), while PPI jumped 4.1% — the strongest growth since July 2022 — driven by elevated energy costs and weak domestic demand.
Monitor energy exposure: With the Strait of Hormuz under threat, consider reviewing portfolio exposure to oil-sensitive sectors and energy stocks.
Stay invested in tech fundamentals: Despite geopolitical noise, AI-driven semiconductor demand remains strong — SK Hynix's 7x oversubscribed listing is a clear signal.
Watch Treasury yields: The 30-year yield holding above 5% signals that long-term geopolitical risk is being priced in, which could affect borrowing costs.
Diversify geographically: Asian and European markets showed divergent reactions — Japan and Korea rallied while Australia fell.
Growth investors: benefit from continued tech momentum but must weigh geopolitical risk premiums.
Income-focused investors: should watch the 30-year Treasury yield above 5% for bond rebalancing opportunities.
Global equity holders: in European and Asian markets may see continued volatility tied to Middle East developments.
The market is navigating a delicate balance: AI-driven tech earnings momentum pushing indexes higher versus geopolitical risk keeping oil elevated and safe-haven flows active. The Wells Fargo projection of S&P 500 reaching 7,800–8,000 by year-end suggests confidence in the tech-led recovery, but oil disruptions remain the wildcard.
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