U.S. equities were mixed in late trading on Monday, with signs of stabilization emerging in the chip sector following a sharp selloff last week. The market continued to monitor the escalating tensions in the Middle East and the approaching historic IPO of SpaceX this Friday.
The Dow Jones Industrial Average was up 9.61 points, or 0.02%, at 50,876.39. The Nasdaq Composite gained 297.53 points, or 1.16%, to 26,006.96, while the S&P 500 rose 41.48 points, or 0.56%, to 7,425.22.
Memory chipmaker Micron Technology, which has led the latest phase of the bull market, saw its shares rise 10% on Monday after a 13% drop on Friday. Shares of Nvidia and Broadcom also moved higher.
The Nasdaq Composite had tumbled 4.2% on Friday, marking its largest single-day decline since April 2025, as investors took profits in chip stocks amid economic uncertainty and concerns the stocks had risen too far, too fast. The iShares Semiconductor ETF was up 6% on Monday after plunging 10% on Friday, its worst single-day performance in over six years.
Market analysis suggests that while Friday's selloff was driven by interest rate fears following strong jobs data and Broadcom's disappointing earnings report, investors have not lost confidence in the long-term prospects for artificial intelligence. The Chief Investment Officer for Global Wealth Management at UBS stated that despite recent pressure on tech stocks, the industry's fundamentals remain robust.
The situation in the Middle East remains a key source of uncertainty. Iran launched missile strikes against Israel over the weekend, prompting a large-scale Israeli retaliatory strike on Iran's strategic defense systems. This initially pushed oil prices 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 could launch more severe attacks if Israel resumes strikes 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 partly easing market 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. Earlier, the Israeli Defense Forces' X account stated that in response to the Iranian attack, Israel conducted a "large-scale strike on strategic defense systems" on Monday.
Another focal point for the market this week is the planned initial public offering of SpaceX on Friday. The IPO reportedly aims 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 listing will be a crucial test for the current AI valuation narrative, and its market performance could significantly impact sentiment in the technology sector.
Looking ahead, investors will focus on inflation data and the public listing of Elon Musk's SpaceX on Friday. The offering is expected to be one of the largest IPOs in Wall Street history and could represent the biggest test to date for the market's AI valuation story.
In overseas markets, Asia-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. Japan's Nikkei 225 index fell 3.85%.
The Chief Market Strategist at Ritholtz Wealth Management, Callie Cox, commented, "The stock market may be becoming a victim of its own success. The jobs market has improved, but the threat of persistently high inflation still seems to be the risk hanging over everyone's head."
She added, "Since the March lows, growth and momentum have outperformed almost every other strategy. That's unusual in a high-rate, high-inflation environment, and these strategies could become vulnerable to disappointment if cost pressures remain elevated."
Cox further noted, "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 cool-headed mindset hold when the largest IPO under the sun is about to take the stage?"
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