US equities opened higher on Monday evening, Beijing time. Chip stocks showed signs of stabilizing and rebounding after a brutal sell-off last week, although overall market sentiment remained cautious due to ongoing Middle East tensions and the impending historic SpaceX IPO this Friday.
The Dow Jones Industrial Average rose 105.34 points, or 0.21%, to 50,972.12. The S&P 500 gained 58.65 points, or 0.79%, reaching 7,442.39. The Nasdaq Composite advanced 400.06 points, or 1.56%, to 26,109.496.
Memory chipmaker Micron Technology, a leader in the recent bull run, climbed more than 5% on Monday after falling 13% on Friday. Shares of NVIDIA and Broadcom also rebounded.
The semiconductor sector displayed clear signs of a bounce. Micron Technology was up 4%, following its 13% plunge on Friday. NVIDIA and Broadcom also saw pre-market gains of approximately 2% and 1.5%, respectively.
Market analysis suggests that while Friday's sell-off was primarily driven by interest rate hike fears triggered by strong non-farm payroll data and Broadcom's disappointing earnings report, investors have not lost confidence in the long-term prospects of AI. The Chief Investment Officer of Global Wealth Management at UBS noted that despite recent pressure on tech stocks, the sector's fundamentals remain robust.
The situation in the Middle East remains the biggest uncertainty for markets. Iran's missile attack on Israel over the weekend, followed by a large-scale Israeli strike on Iran's strategic defense systems, pushed 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 that Iran might launch more severe attacks if Israel resumed assaults on Lebanon.
U.S. President Trump also stated that both sides were seeking an "immediate ceasefire," causing oil prices to retreat from their highs and partially easing market concerns about an energy price shock.
At the time of writing, West Texas Intermediate crude futures were up over 1%, trading around $92 per barrel. This followed a statement from the Israeli Defense Forces' X account that, in response to Iran's attack, Israel had conducted a "large-scale strike on strategic defense systems" on Monday.
Another major focus for the market this week is SpaceX's planned initial public offering on Friday. The IPO reportedly aims to raise $75 billion, targeting a valuation of around $1.8 trillion, which would make it the largest listing in Wall Street history. Market sources indicate investor demand has reached approximately $1.5 trillion, roughly double the fundraising target. Analysts believe SpaceX's listing will serve as a critical test for the current AI valuation narrative, and its market performance could significantly impact sentiment in the tech sector.
In the week ahead, investors will focus on inflation data and the public listing of Elon Musk's SpaceX on Friday. This offering is expected to be one of the largest IPOs in Wall Street history and could also represent the most significant test yet of the market's AI valuation story.
The Nasdaq Composite closed down 4.2% on Friday, marking its largest single-day drop since April 2025, as investors took profits in chip stocks due to concerns about economic uncertainty and excessive gains in the sector.
In overseas markets, Asian-Pacific markets fell sharply on Monday, echoing Friday's Nasdaq decline. South Korea's benchmark Kospi index led the losses, dropping over 8% to close at 7,484.41 points.
The Chief Market Strategist at Ritholtz Wealth Management, Carly Cox, stated, "The stock market may be becoming a victim of its own success. The job market has improved, but the threat of persistent high inflation still seems to be the risk hovering over everyone's heads."
She added, "Since the March lows, growth and momentum strategies have outperformed almost all others. This is uncommon in a high-interest-rate, high-inflation environment, and if cost pressures remain elevated, these strategies could become vulnerable to disappointment."
Cox said, "In past market cycles, blockbuster IPOs have often marked the peak of excessive speculation. So, there seems to be an awkward silence about what this might mean for market sentiment. Many investors appear restrained and skeptical, but can this calm mindset hold when the largest IPO under the sun is about to take the stage?"
Friday's U.S. non-farm payroll data for May far exceeded expectations, significantly boosting market expectations for a Federal Reserve rate hike and severely testing the valuation bubble in tech stocks driven by the AI frenzy. The Philadelphia Semiconductor Index plunged 10% in a single day on Friday, erasing over a trillion dollars in market value. Secondly, hostilities between Iran and Israel escalated once again.
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