Stocks Gain as Chipmakers Rebound

The S&P 500 Index rose 0.38%, the Dow Jones Industrial Average increased 0.17%, and the Nasdaq 100 surged 1.26% today. E-mini futures for the S&P 500 and Nasdaq 100 also climbed, reflecting optimism in tech and AI-driven markets. The rebound in semiconductor and artificial intelligence infrastructure stocks accelerated Monday’s recovery, with major indexes reversing prior losses. However, software companies faced pressure after Morgan Stanley issued downgrades, leading to declines in Adobe (ADBE), Intuit (INTU), and Workday (WDAY).

Energy prices edged upward, though crude oil remained below 5-week highs. WTI crude oil (CLQ26) gained over 1% as U.S.-Iran tensions persisted amid ongoing strikes. The U.S. targeted military infrastructure in Iran, while Iran retaliated with attacks on U.S. sites in Kuwait and Jordan. UK naval forces reported Iranian activity near the Strait of Hormuz. Houthi rebels also announced a Red Sea blockade against Saudi Arabia, raising concerns over oil exports. Meanwhile, forecasts for Q2 earnings, estimated to rise 23%, signal strong market confidence. AI infrastructure stocks are projected to drive 60% of the S&P 500’s earnings-per-share growth, amid surging demand for advanced technologies.

European markets edged higher, with the Euro Stoxx 50 rising 0.41%. Asia-Pacific markets saw sharper gains, as China’s Shanghai Composite climbed 1.79%, and Japan’s Nikkei-225 surged 3.26%. U.S. interest rates showed mixed signals: September T-notes fell 4 ticks, with 10-year yields hitting 4.616%, influenced by elevated oil prices and Middle East tensions. Swaps priced a 5% probability of an ECB rate hike, while U.S. markets discounted a 17% chance of a 25-basis-point hike at the upcoming FOMC meeting.

U.S. stock movers highlighted gained momentum led by chipmakers and cryptocurrency-linked equities. The iShares Semiconductor ETF (SOXX) gained over 3%, with Sandisk (SNDK), Teradyne (TER), Micron Technology (MU), and Western Digital (WDC) rising more than 8%. Nvidia’s stake in Nebius Group NV (NBIS) propelled a 8% uptick, as did Hasbro Inc (HAS), which exceeded earnings forecasts[STOCKS GAIN ON TECH REBOUND AS INVESTORS ANTICIPATE AI-DRIVEN EARNINGS GROWTH]

The S&P 500, Dow Jones Industrial Average, and Nasdaq 100 opened higher today, with the Nasdaq surging 1.26% as semiconductor and artificial intelligence infrastructure stocks powered broad market gains. September E-mini S&P futures (+0.35%) and Nasdaq futures (+1.27%) signaled continued optimism. The rebound caps a recent correction in tech valuations, with investors betting on strong Q2 earnings from megacap tech firms. Alphabet, Microsoft, and other AI leaders are due to report results this week, with Bloomberg Intelligence forecasting Q2 earnings to rise 23%—closing in on Q1’s record 30% jump that exceeded pre-pandemic analyst expectations.

Crude oil prices rose more than 1% amid escalating U.S.-Iran tensions. Iran launched strikes targeting U.S. military sites in Kuwait and Jordan, while U.S. attacks focused on Iranian facilities. The UK reported Iranian vessels struck near the Strait of Hormuz, and Houthi rebels announced a maritime blockade of Saudi Arabia, threatening Red Sea oil exports. Despite tensions, oil prices remain subdued compared to last month’s 5-week highs.

Market sentiment turned cautious toward software stocks after Morgan Stanley initiated sell ratings on Adobe, Intuit, and Workday. The firm cited margin pressures and evolving demand for AI-first enterprise solutions. Tokyo stocks soared 3.26%, driven by Bank of Japan intervention and resilient demand for yen-denominated reserves.

U.S. equities benefited from expectations of stable monetary policy. A 17% chance of a 25-basis-point Fed rate hike at July’s meeting suggests markets anticipate minimal tightening. Zero-hour swaps imply 93% probability of no hike, despite inflation concerns from elevated oil and geopolitical risks.

European bond yields accelerated higher as Germany’s 10-year bund hit a 2-month high of 3.175%, while U.S. yields edged up 2.4 basis points to 4.62%. The German ZEW economic sentiment survey showed strong rebound, rising 15.8 points to 26.3—the highest since January.

Top gainers included semiconductor stocks leading Nasdaq 100 advances. Sandisk (SNDK) jumped 10%, Teradyne (TER) and Micron (MU) rose 8%+, while AMD, LRCX, and KLA kept pace at 4%+. Bitcoin (^BTCUSD) touched a month high, propelling crypto-linked equities: Coinbase (+8%), Marathon Digital (+3%), and MicroStrategy (+3%) surged. Conversely, 3M (+8%) and Halliburton (+5%) outperformed Dow peers after resilient earnings reports.

Earnings season intensified with 63+ S&P 500 components reporting through July 21. 3M (MMM) raised EPS guidance to $8.80-8.95 after Q1 earnings beat ($2.40 vs. $2.25 est.), while Intuit (INTU) and ServiceNow (NOW) faced pressure from downgrades. Oil majors remained subdued amid OPEC+ supply worries.

Equity flows reflected geopolitical sensitivity. Updates on U.S.-Iran conflict tracking and Red Sea logistics disclosures drew reduced safe-haven inflows. The CBOE Volatility Index (VIX) remained range-bound at 18.2%, indicating relatively calm sentiment despite macro risks.

Market Data Disclaimer: As of publication, R. Asplund held no positions in mentioned securities. All content reflects author views, not Nasdaq Inc. methodology. Fees or potential conflicts may exist with referenced data sources.

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