Closing Bell: Markets Regain Muscle After Sell-Off, Oil Sinks, AI Chips Rally
Markets staged a comeback following Wednesday’s sell-off after President Trump said a deal with Iran was imminent, signaling an ease in tensions to the U.S.-Iran war. Semiconductor, technology hardware, and software company strength helped lift indexes into Thursday’s close.
The S&P 500 climbed 1.75% to close at 7,394.30, the tech-heavy Nasdaq-100 rallied 3.29% to 29,446.18, and the Dow Jones Industrial Average rose 1.86% to finish at 50,848.75. The Philadelphia Semiconductor Index (SOX) surged nearly 8%.
Overnight strikes Tuesday and Wednesday in Iran by the U.S., and Iran retaliation targeting U.S. bases in countries near the Strait of Hormuz, added upside pressure to crude oil prices, which climbed past $93 during overnight trading hours into today’s session. Favorable headlines on the U.S.-Iran conflict sent the U.S. benchmark price to near $86 Thursday.
The CBOE Market Volatility Index (VIX) cascaded 12.51% lower to 19.44.
Three things to watch from today’s market:
- The highly anticipated SpaceX initial public offering priced at $135 per share. SpaceX will commence trading as a public company Friday on the Nasdaq Stock Market with the ticker SPCX. At that price, the company would be valued at roughly $1.77T. Only a fraction of SpaceX shares, about 5%, will be available for public trading.
- Cloud computing giant Oracle (ORCL) was one of the biggest laggards in the S&P 500 Thursday. Shares slid 8.5% to $184.10. The culprit: the company plans to double debt and equity financing to $40B. It overshadowed Oracle’s fourth quarter earnings beat, backed by a 24% year-over-year revenue increase to $19.18B, ahead of Wall Street’s $19.08B consensus. Earnings came in at $2.11 per share versus expectations of $1.96. Analyst opinions were mixed. UBS said the stock move has been “overly punitive” given in-line or better quarterly results. Wedbush cut its price target to $240 from $275, and maintained an outperform rating, but said in a report Thursday that the big debt and equity financing to support the AI/cloud opportunity ahead “is not a move the Street wants to see.”
- Semiconductors Demand Prompts Upgrades: Wall Street price target hikes, based on an expected sales ramp up in 2027 and 2028, helped lift select stocks. Barclays upped its target on KLA Corporation (KLAC) (semiconductor process control and yield management) to $2,250 from $1,700; Applied Materials (AMAT) (semiconductor manufacturing equipment and services), to $590 from $500; and large memory equipment manufacturer Lam Research (LRCX) (wafer fabrication equipment and services), to $335 from $275. KLAC and both rallied 12% on Thursday while Applied Materials rose 11%. In addition, JP Morgan sees sales and earnings improvement for Seagate Technology Holdings (STX) (data storage and hard drives) given hyperscaler storage needs. While Seagate stock has appreciated more than 560% to $842 over the past year, JP Morgan raised its target to $920 from $775. Meanwhile, shares of Super Micro Computer (SMCI), maker of high-performance servers and storage systems, rallied 9.2% Thursday after it priced an equity offering that sparked a 28% sell-off Wednesday.
Economic Events Friday (ET)
- 10:00AM: Michigan Consumer Sentiment Preliminary (June)
- 01:00PM Baker Hughes Rig Count
Earnings Calendar (ET)
- Premarket Friday: None
- Postmarket Friday: None
- Premarket Monday: PowerFleet (AIOT), Canopy Growth (CGC)
- Postmarket Monday: Dave & Buster’s Entertainment (PLAY), High Tide (HITI)
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