U.S. stock indexes rose on Tuesday as traders returned from the prior Friday holiday, with the Nasdaq 100 hitting a 2.5-week high. The S&P 500 was up 0.21%, the Dow Jones Industrial Average gained 0.54%, and the Nasdaq 100 advanced 0.50%, while chip and artificial intelligence infrastructure shares led gains. Market momentum initially softened overnight as crude oil surged, but futures rebounded after Iran said it had made “major progress” with the United States on a peace deal and that the Strait of Hormuz would remain open.
Key takeaways
- Price move: The Nasdaq 100 climbed to a 2.5-week high, lifting the S&P 500, Dow, and Nasdaq 100 by modest margins.
- Catalyst: Oil’s volatility tied to Middle East developments eased after Iran and the U.S. discussed a peace framework and planned follow-on talks.
- Investor implication: Risk appetite returned, particularly for semiconductors and AI-related infrastructure as investors leaned into the technology complex.
- Rates backdrop: Treasury yields rose as markets weighed future supply, even as European government bonds moved lower.
What drove the move
According to market coverage, equity futures opened lower overnight amid a jump in crude oil prices after Iran threatened to suspend talks and close the Strait of Hormuz following Israeli attacks in Lebanon tied to Hezbollah. President Trump also signaled possible military action against Iran if Hezbollah continued attacks against Israel.
However, the pitch changed after Iran said it had made “major progress” with the U.S. during all-night discussions about a peace deal following an interim agreement that extended a 60-day ceasefire. Pakistan and Qatar said in a joint statement that there was “encouraging progress” in the talks and that the U.S. and Iran agreed to create a “high-level committee” to oversee negotiations. They also cited working groups covering nuclear issues and sanctions on Iran, along with a de-confliction process related to military operations in Lebanon.
Separately, the British pound weakened after Keir Starmer said he would step down as the U.K. prime minister, setting up Andy Burnham as the successor. Markets were reported to be waiting for Burnham’s appointment of a Chancellor of the Exchequer, with concern focused on credibility around deficits and borrowing.
In the U.S., markets were also pricing monetary policy expectations ahead of upcoming decisions. The article said markets were discounting a 36% chance of a +25 basis point rate hike at the next FOMC meeting on July 28–29.
Market reaction
Technology and semiconductors accounted for much of the day’s upward pressure. Data cited in the report showed the iShares Semiconductor ETF (SOXX) rising more than 2% to a new record high. Individual chipmakers climbed broadly: Sandisk rose more than 6%, ON Semiconductor gained more than 6%, Micron Technology advanced more than 5%, and Intel rose more than 4%. Other names including Applied Materials and KLA Corp were up more than 3%, while Seagate Technology, NXP Semiconductors, and Lam Research were each higher by more than 2%.
Beyond semiconductors, the report noted strength in cryptocurrency-exposed equities, following higher moves in Bitcoin. Bitcoin was up more than 3%, contributing to double-digit gains in some leveraged and crypto-linked stocks, including MARA Holdings up more than 10% and Coinbase Global and Riot Platforms each up more than 6%. Strategy rose more than 4% and Galaxy Digital gained more than 3%.
Rates and global developments
Bond markets reflected an environment where supply and policy expectations were competing. The article reported that September 10-year Treasury notes were down by 9 ticks, while the 10-year Treasury yield rose by 3.6 basis points to 4.489%. It also stated Treasuries fell to a one-week low and that the yield reached a one-week high of 4.503%. The move was attributed to negative carryover from a prior Fed projection that higher rates may persist later in the year, along with expectations that supply would weigh on pricing. The report said the Treasury is set to auction $211 billion of Treasury notes and floating-rate notes this week, starting Tuesday with a $69 billion 2-year auction.
In Europe, the direction was mixed-to-lower for yields, with the 10-year German bund yield reported down 3.9 basis points to 2.946%. The 10-year U.K. gilt yield fell by 5.2 basis points to 4.789%, after trading from a one-week high of 4.855%.
According to the report, ECB President Christine Lagarde said the ECB does not need to respond more forcefully to the Middle East conflict because inflation is expected to return to target over the medium term. It also said swaps were pricing about a 10% chance of a +25 basis point ECB rate hike at the ECB’s July 23 policy meeting.
Overseas stocks were broadly higher. The report cited an advance in the Euro Stoxx 50, a Shanghai Composite close at a one-month high, and Japan’s Nikkei-225 rising to a new all-time high.
Single-stock movers and corporate news
Several company-specific developments drove outsized moves. Definium Therapeutics rose more than 50% after meeting a primary endpoint in a Phase 3 study for its DT120 tablet in adults with major depressive disorder. Apogee Therapeutics climbed more than 46% after being agreed to be acquired by AbbVie for $10.9 billion.
Other reported catalysts included:
- Baldwin Insurance Group up more than 17% after JPMorgan Chase upgraded the stock to overweight from neutral with a $28 price target.
- Super Micro Computer gained more than 13% after GF Securities upgraded the stock to buy from hold with a $48 price target.
- Fervo Energy rose more than 12% after partnering with Pacific Northwest National Laboratory and NVIDIA to develop a digital twin platform for Enhanced Geothermal Systems.
- Acrosa climbed more than 7% after the Financial Times reported that CRH is nearing a deal to acquire the company.
- Ligand Pharmaceuticals fell more than 6% after announcing plans to offer $550 million of convertible senior notes due 2031.
- Alphabet dropped more than 3% after news that Google DeepMind Vice President Jumper is leaving to join Anthropic PBC.
- Echostar was down more than 1% after DISH DBS said an interest payment on notes due June 1 would be delayed.
Looking ahead, investors will likely focus on how geopolitical headlines continue to influence energy prices, given today’s oil-driven whipsaw. The next major catalyst in the interest-rate calendar is the upcoming FOMC meeting, alongside Treasury’s ongoing auction schedule, which can affect yields and equity valuations.
