U.S. equities rally after Iran accord; semiconductors hit fresh records
Tide Research — U.S. stocks rebounded Thursday as investors cheered a temporary U.S.-Iran agreement formally signed in Geneva. The reopening of the Strait of Hormuz and the passage of three Saudi supertankers helped ease geopolitical concerns, pushing risk appetite back to the forefront and eclipsing the prior day's hawkish FOMC impact.
The S&P 500 rose 1.08% to 7,500.58 and the Nasdaq gained 1.91% to 26,517.93, snapping a two-day slide. The Dow added 0.14% to 51,564.70 for its third record close of the week. Small caps outperformed, with the Russell 2000 up 2.12% to 2,979.77, signaling a rotation toward higher-beta names that had led the previous pullback.
Semiconductors powered the advance. The Philadelphia Semiconductor Index jumped more than 6% to a new all-time high, extending gains across equipment, storage, and AI-related compute names.
In a post on Truth Social, President Donald Trump said Apple and Intel have reached a design-and-manufacturing partnership initially focused on mature-node chips for iPads and older iPhone models, while flagship products will continue to be supplied by TSMC. Talks have been underway for more than a year, and the arrangement would represent Intel's most meaningful external foundry win while reducing Apple's reliance on TSMC. Neither company has publicly confirmed the details.
The same post said Nvidia has agreed to have its initial chips manufactured by Intel, and that Elon Musk pledged to co-build the world's largest wafer fab, TerraFab. Intel shares rose about 10.5% to $133.82.
Memory and storage names also surged after reports that Apple, facing higher memory and storage chip costs, plans to raise prices. Micron climbed nearly 9% and SanDisk rose more than 11%, lifting the broader storage supply chain. Nvidia advanced nearly 3%.
SpaceX fell 3.56% to $185.00, its second straight decline and down roughly 8.3% over two sessions. Bloomberg reported the company is preparing to issue at least $20 billion of investment-grade U.S. dollar bonds to refinance bridge loans due in 2027. Concerns about potential equity dilution, coupled with the hawkish rate backdrop, weighed on the shares. Even so, SpaceX remains up nearly 15% for the week and about 37% above its IPO offering price.
Energy was the only S&P 500 sector to finish lower as oil retreated. WTI crude slid about 2% to $74.29 a barrel, a three-month low. Exxon Mobil and Chevron fell sharply, and the Dow Jones Transportation Average dropped more than 4%. With Hormuz reopened, markets appear to have largely stripped out the geopolitical risk premium that helped lift crude earlier this year.
Volatility eased sharply. The VIX fell 11.06% to 16.40, suggesting Wednesday's FOMC-driven hedging demand faded quickly. The 10-year Treasury yield inched down to around 4.445%, while the 2-year held above 4.18%, indicating markets have not materially backed away from pricing a potential September rate hike.
Gold slipped to $4,210 an ounce and silver also moved lower. The U.S. dollar index edged down but remained elevated. Crypto markets were subdued, with Bitcoin (CoinGecko) near $64,026 and Ethereum near $1,734.
Next week's calendar includes PCE inflation, Flash PMI, and Micron's earnings. Micron's guidance is expected to be a key read-through on AI-driven demand, after a prior guidance miss triggered a sharp, broad semiconductor selloff. The Russell Reconstitution takes effect at the close next Friday, which could amplify volume and volatility in small caps.
Tide's view: Thursday's rebound rested on two drivers. First, the U.S.-Iran agreement reduced the geopolitical premium in risk assets and crude—a largely one-off repricing that is now mostly reflected in markets. Second, semiconductors reinforced the durability of the AI capex theme, with synchronized strength across Intel, SanDisk, and Micron pointing to broad-based momentum.
A new overhang has emerged for SpaceX: if the reported $20 billion bond deal proceeds, financing demands and dilution expectations could become persistent pressure rather than a one-time valuation reset. The near-term test is PCE. Another upside surprise would push a September hike from a probability toward consensus, making Thursday's rally look like a temporary reprieve. A softer print could quickly revive dovish repricing.
