US stock markets closed with mixed results in Monday's session, with the Dow Jones Industrial Average declining for a second consecutive day while the Nasdaq Composite and S&P 500 indices rebounded.
Chip stocks stabilized after facing intense selling pressure last week.
Market participants continued to monitor the escalating tensions in the Middle East and looked ahead to the landmark initial public offering for SpaceX scheduled for this Friday.
The Dow fell 80.77 points, or 0.16%, to close at 50,786.01.
The Nasdaq gained 220.23 points, or 0.86%, finishing at 25,929.66.
The S&P 500 rose 21.94 points, or 0.30%, to end the session at 7,405.68.
Leading the rebound, shares of memory chipmaker Micron Technology Inc surged 10% on Monday after a 13% drop on Friday.
Shares of NVIDIA Corp and Broadcom Inc also moved higher.
The Nasdaq Composite had plunged 4.2% on Friday, marking its worst single-day decline since April 2025, as investors took profits in chip stocks amid economic uncertainty and concerns the sector had become overextended.
The iShares Semiconductor ETF, which tumbled 10% on Friday, climbed 6% on Monday.
That 10% drop represented the ETF's worst daily performance in over six years.
Market analysis suggests that while Friday's sell-off was driven by interest rate fears following strong jobs data and a disappointing earnings report from Broadcom, investors have not lost long-term confidence in the artificial intelligence theme.
The chief investment officer for global wealth management at UBS noted that despite recent pressure on tech stocks, the sector's fundamentals remain robust.
Geopolitical tensions in the Middle East remain a significant source of market uncertainty.
Iran launched a missile attack against Israel over the weekend, to which Israel responded with a large-scale strike on Iran's strategic defense systems, sending oil prices briefly above $92 per barrel.
However, Iran's Fars News Agency later reported that the country's armed forces had concluded their military action against Israel but warned of a more severe response if Israel resumed attacks on Lebanon.
US President Trump also stated that both sides were seeking an "immediate ceasefire," causing oil prices to retreat from their highs and partly easing concerns about an energy price shock.
At the time of writing, West Texas Intermediate crude futures were up over 1% to around $92 per barrel, following a statement from the Israeli Defense Force's X account that Israel had conducted a "large-scale strike on strategic defense systems" on Monday in response to Iran's attack.
Another key focus for markets this week is the planned IPO for SpaceX on Friday.
The offering is reportedly aiming to raise $75 billion, targeting a valuation of approximately $1.8 trillion, which would make it the largest listing in Wall Street history.
Market sources indicate investor demand has reached about $1.5 trillion, roughly double the fundraising target.
Analysts believe the SpaceX debut will serve as a critical test for current AI valuation narratives and its market performance could significantly influence sentiment across the technology sector.
In the coming week, investors will focus on inflation data and the public listing of Elon Musk's SpaceX on Friday.
The launch is expected to be one of the largest IPOs in Wall Street's history and could represent the most significant test to date of the market's appetite for AI-related valuations.
In overseas markets, Asia-Pacific markets fell sharply on Monday, echoing the Nasdaq's Friday decline.
South Korea's benchmark Kospi index led the losses, dropping over 8% to close at 7,484.41.
Japan's Nikkei 225 index declined 3.85%.
The chief market strategist at Ritholtz Wealth Management, Carly Cox, stated that the stock market may be becoming a victim of its own success, noting that while the jobs market has improved, the threat of persistent high inflation remains a risk hanging over everyone's head.
She added that since the March lows, growth and momentum strategies have outperformed almost all others, which is uncommon in a high-rate, high-inflation environment, and these strategies could become vulnerable to disappointment if cost pressures remain elevated.
Cox remarked that in past market cycles, blockbuster IPOs have often marked peaks of excessive speculation.
She observed an awkward silence regarding what this could mean for market sentiment, questioning whether the current restrained and skeptical investor mindset can be maintained as the largest IPO in history approaches.
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