Dow gains 139 points as chip stocks rally despite renewed US-Iran strikes

• Micron Technology gained 4.5% after unveiling a $250+ billion U.S. investment plan through 2035 to expand memory chip production for AI demand; the Philadelphia Semiconductor Index extended its recent advance
• Markets shrugged off geopolitical tensions as crude oil prices fell after President Trump said Iran had called to make a deal, despite ongoing U.S. strikes and disruptions near the Strait of Hormuz
• The Fed remains in focus as traders price in a likely 25-basis-point rate hike by December, while June meeting minutes revealed some officials considered raising rates before holding steady

Market Summary: Dow Gains on Chip Rally Amid Geopolitical Tensions

Key Market Performance

US markets closed higher Thursday with the Dow Jones up 139.02 points (+0.27%) to 52,487.41, the Nasdaq gaining 1.30% to 26,206.89, and the S&P 500 rising 0.81% to 7,543.65.

Semiconductor Sector Leads Rally

Chip stocks drove market gains, with the Philadelphia Semiconductor Index extending its advance. Micron Technology surged 4.5% after announcing plans to invest over $250 billion through 2035 in US memory chip production to meet AI-driven demand. SanDisk jumped 7.6%, while Applied Materials also posted strong gains. Meta's stock rose following Reuters reports that the company will begin manufacturing its proprietary AI chip in September 2026.

Earnings Outlook

The Q2 earnings season approaches with analysts projecting 24% average year-over-year earnings growth for S&P 500 companies, according to LSEG I/B/E/S. Technology companies are expected to contribute significantly to this growth.

Geopolitical Developments

Despite renewed US-Iran military strikes for the second consecutive day and tensions around the Strait of Hormuz, markets remained resilient. Oil prices declined after President Trump indicated Iran sought negotiations, with Qatar and Pakistan facilitating talks.

Monetary Policy

Federal Reserve June meeting minutes revealed some officials considered raising rates before agreeing to hold steady. Jobless claims data showed labor market stability. Traders currently price in a likely 25-basis-point rate hike by December 2026.

Global Markets

European markets recovered with the Stoxx 600 up 0.8%. 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%.