Dow Jones slips even as chip stocks offset renewed US-Iran tensions

• Semiconductor stocks led gains with SMH ETF up 3.88%, Micron +7.2%, and Sandisk +6%, while other tech names declined including Meta (-3.4%) after announcing AI chip production plans
• US military launched strikes on Iran to keep the Strait of Hormuz open, with Iran responding by attacking US assets in Kuwait and Bahrain, though President Trump said he did not expect full-scale war
• Economic data showed declining jobless claims indicating labor market stability, while traders price in at least one 25-basis-point Fed rate hike by year-end according to LSEG data

Market Summary: Chip Stocks Rally Amid Geopolitical Tensions

Market Performance (July 9, 2026):

U.S. markets opened mixed with the Dow Jones falling 28 points (-0.05%), while the S&P 500 gained 0.11% and Nasdaq advanced 0.14%. Semiconductor stocks drove the positive momentum despite renewed U.S.-Iran tensions in the Middle East.

Sector Highlights:

The VanEck Semiconductor ETF (SMH) surged 3.88%, led by Micron Technology (+7.2%) and Sandisk (+6%). This followed Micron's announcement of up to $3 billion investment in U.S. chip supply chain infrastructure.

Notable Decliners:

Technology stocks experienced mixed performance. Meta Platforms dropped 3.4% after Reuters reported plans to produce proprietary AI chips starting September. IBM fell 3.4% and Microsoft declined 1.7% following reports that Starbucks adopted alternative AI technology. ServiceNow (-2.5%) and Adobe (-1.3%) also retreated.

Geopolitical Developments:

Fresh U.S. military strikes on Iran aimed at keeping the Strait of Hormuz open triggered market volatility. Iran retaliated with attacks on U.S. assets in Kuwait and Bahrain. President Trump stated he doesn't expect full-scale war, helping ease investor concerns.

Economic Data:

Initial jobless claims declined, indicating labor market stability. Federal Reserve minutes from June showed rates remained unchanged, though some officials considered adjustments. Traders are pricing in at least one 25-basis-point rate hike by year-end.

Global Markets:

European Stoxx 600 rose 0.55%. Asian markets were mixed: Japan's Nikkei (+1.4%), South Korea's Kospi (+0.62%), China's CSI 300 (+2.5%), while Hong Kong's Hang Seng fell 0.5%.

Market Implications:

Semiconductor strength suggests investor appetite for AI-related growth despite geopolitical risks and concentration concerns around technology valuations.