Traders work on the floor of the New York Stock Exchange.
NYSE
U.S. equities rose on Tuesday as chip stocks rebounded for a second day from last Friday’s rout and oil prices pulled back on hopes a U.S.-Iran deal is nearing.
The S&P 500 was up 0.6%, while the Nasdaq Composite gained 0.7%. The Dow Jones Industrial Average advanced 313 points or 0.6%.
Micron Technology was higher by almost 4%, adding to a 10% comeback on Monday. The shares tumbled about 20% in the two days ending last week, including a 13% rout on Friday. The iShares Semiconductor ETF was up 2% following a 6% rebound on Monday. The ETF tumbled 10% on Friday for its worst day in six years as investors feared the AI-driven run in chips had risen too far, too fast.
West Texas Intermediate crude futures shed about 3% to trade under $90 a barrel as President Donald Trump said a deal between the U.S. and Iran could be reached in “two or three days” that opens the Strait of Hormuz “immediately.”
Iran on Monday halted military strikes against Israel, but warned it would resume attacks if Israeli forces continue operations in Lebanon, Tehran’s foreign ministry told CNBC on Monday. Hours later, Israeli Prime Minister Benjamin Netanyahu said the conflict with Iran and Hezbollah was “not yet over.”
In Asia, Japan’s Nikkei 225 was over 2% higher, ending the trading day at 65,416.63, while South Korea’s Kospi rebounded from Monday’s slump, jumping 8.18% to 8,096.93. Hong Kong’s Hang Seng Index edged 0.15% higher, while the mainland’s CSI 300 was up 1.87% to 4,801.81. Australia’s benchmark S&P/ASX 200 was down 0.24% to 8,604.2.
Chip stocks led the S&P 500 higher in regular trading Monday, with the index rising 0.3%. The tech-dominant Nasdaq Composite climbed 0.86%. Both averages clawed back some of their losses from last week’s tech rout. The blue-chip Dow, on the other hand, bucked the trend to shed 80.77 points, or 0.16%.
Although the artificial intelligence and chip trade has been the primary market driver on Monday and in other recent sessions, Brian Kersmanc, portfolio manager at GQG Partners, offered some skepticism over the trend’s longevity.
“What the issue is on a longer-term basis is sustainability,” Kersmanc said on CNBC’s “Closing Bell: Overtime” on Monday afternoon. “So, how much further does this sustain on a longer-term basis?”
“At the end of the day, a lot of these chip names are commodities,” the portfolio manager added. “And if you look at it in terms of a commodity, when you have a rapid price increase that you had — in some areas of memory, you had a 15x price increase over the course of last year or so — if I were to recontextualize that … a 15x increase in energy, go from $60 a barrel to $900 a barrel, how many energy stocks would people be buying right now?”
OpenAI confidentially filed for an IPO late Monday, adding to enthusiasm around the AI trade. Space and AI play SpaceX is set to make its debut on Friday in what will be the largest IPO ever. The offering is seen by some as adding fuel to the AI-driven bull market, but some investors are wary that it could also mark a top in the trend with its $1.75 trillion valuation.
