Wall Street Inches Higher on Semiconductor Rebound Despite Middle East Volatility

Wall Street’s major indexes ticked upward on Thursday as bargain-hunting investors bought into heavily beaten-down semiconductor stocks. The modest rally follows a sharp market downturn on Wednesday, which saw major indexes slide over 1% and pushed the broader tech sector into brief correction territory (defined as a 10% drop from recent highs).

While the tech sector stabilized, overall gains remained capped by escalating geopolitical conflict in the Middle East and unexpectedly hot economic data.

Tech and Semiconductor Rebound

Following days of persistent selling, investors stepped back into the hardware and semiconductor space, hunting for oversold value.

• Chipmakers Lead the Charge: The Philadelphia SE Semiconductor index jumped 4.5%. Intel led the pack, soaring over 11%, while Micron Technology surged 9.8%, and Applied Materials climbed 8.6%. Nvidia also stabilized, posting a 1.3% gain.

• The Oracle Drag: The tech sector’s gains were partially offset by enterprise software heavyweight Oracle, whose shares plummeted 12.5% after the company announced massive capital expenditure plans for 2027 that far exceeded Wall Street estimates. Software peers like SAP and Salesforce slid in tandem.

• Communication Lag: The communication services sector dropped 1.5%, weighed down by nearly 2% declines in both Alphabet and Meta.

Geopolitical Flares and Macro Economic Triggers

The market’s upward momentum was heavily pressured by severe geopolitical headlines and data suggesting sticky inflation:

• The Iran Threat: Geopolitical tensions flared after U.S. President Donald Trump warned that Washington would hit Iran “very hard” and move to take control of the country’s oil and gas infrastructure. The threat immediately pushed global crude oil prices higher, adding to market anxiety.

• Sticky Wholesale Inflation: New economic data revealed that U.S. producer prices (wholesale inflation) increased faster than expected in May, marking the largest annual gain in over three years and signaling that consumer price pressures may remain stubborn.

• Federal Reserve Outlook: In light of the inflation data, the Federal Reserve is widely anticipated to hold interest rates steady at its policy meeting next week, though investors are increasingly pricing in at least one more rate hike before the end of the year.

Market Standings (Morning Trading)

Looking Ahead: Traders are closely watching the upcoming market debut of Elon Musk’s SpaceX on Friday. The blockbuster public listing—carrying an expected $1.75 trillion valuation—will serve as a major liquidity test for the stock market’s record-setting momentum.