Daily Summary: Chip War Weighs on Wall Street as Oil Plunges After US–Iran Ceasefire ⭐

📈 Stock Market

• Little trace remains on Wall Street of the initial euphoria triggered by news of a ceasefire between the US and Iran.

• Key US indices are currently trading in the red.

• S&P 500 is down about 0.3%, Nasdaq 100 falls nearly 0.7%, while only Dow Jones remains marginally in positive territory.

• Pressure is focused primarily on the semiconductor sector and companies tied to the memory market.

• Micron falls over 5.5%, Sandisk drops nearly 12%, and Nvidia drops over 5%.

• Meanwhile, hyperscalers are faring somewhat better, posting gains today.

• The deterioration in sentiment was driven by reports on China's progress in developing its own semiconductor manufacturing equipment, which could threaten the position of European industry leader ASML in the future.

• Reports indicate that Beijing is developing domestic DUV (Deep Ultraviolet Lithography) equipment, a key technology used to produce advanced chips.

• This news heightened investor concerns over growing competition in the semiconductor sector and its potential impact on the future results of Western manufacturers.

• Furthermore, tech tensions between the US and China were underscored by Donald Trump's statement regarding AI competition: "They are looking at us, we are looking at them."

• These words were interpreted as a sign that the strategic battle for dominance in AI and key technologies remains one of the market's top themes.

• Consequently, the AI and semiconductor segment took the hardest hit—a sector that served as a main growth driver on Wall Street in recent years.

• Investors worry that the development of China's chip industry could limit the long-term advantage of American and European technology firms.

• The session in the Old Continent ended in a decidedly better mood.

• European equity sentiment was buoyed primarily by the ceasefire in the Persian Gulf, which eased fears of further escalation and energy price pressures.

• The UK's FTSE 100 gained 0.4%, as did France's CAC 40.

• Germany's DAX rose over 1.3%, while Spain's IBEX 35 closed the day up 0.8%.

🌐 Geopolitics & Macroeconomics

• Unquestionably, the main catalyst driving market events in the first half of the day was the cessation of hostilities between the United States and Iran.

• Donald Trump stated that the US decided to halt further strikes against Iran following a request from mediating nations asking to give negotiations another chance.

• The US President indicated that intensive talks with Iran are currently underway, though he noted that time to achieve a breakthrough is limited.

• Simultaneously, Trump emphasized that if an agreement is not reached, the US is prepared to return to decisive military action.

• For markets, this primarily brings a reduction in short-term pressure related to conflict escalation risks and potential energy price surges.

• Lower oil prices ease fears of renewed inflation, serving as a positive driver for risk assets and influencing expectations for future Federal Reserve decisions.

• At the same time, markets remain cautious as the current ceasefire does not yet signal a lasting resolution to the conflict.

• Trump's rhetoric indicates this is merely a temporary pause for negotiations rather than a definitive end to military action.

• Should talks fail, a resurgence of Middle East tensions could once again translate into rising oil prices and worsening sentiment across global financial markets.

• Currently, markets are focused on whether diplomatic efforts will lead to a lasting agreement between the US and Iran.

• Maintaining the ceasefire would serve as a tailwind for market sentiment by ensuring lower geopolitical risk, less pressure on energy prices, and reduced concerns over the conflict's impact on the global economy.

🛢️ Commodities

• Ceasefire news was immediately reflected in the oil market, where crude prices plunged sharply due to reduced fears of further escalation in the Middle East and potential global energy supply disruptions.

• A decline in the geopolitical risk premium triggered a clear sell-off in Brent crude, which reacted to prospects of easing tensions between Washington and Tehran.

🪙 Precious Metals

• A cautiously balanced optimism prevails in the precious metals market.

• Gold futures are up about 0.5%, approaching the $4,100 level.

• Silver futures gain 0.7%, hovering around $58.

🪙 Cryptocurrencies

• Positive sentiment is also present in the digital assets market.

• Bitcoin gains about 0.3%, testing the $65,000 level.

• Ethereum rises nearly 1%, trading around $1,940.