Daily Wrap: Technology Leads Wall Street Higher. Markets Shrug Off US–Iran Tensions

📈 Stock Market

• A return of partial optimism to Wall Street after recent days of sell-offs – the main US stock market indices are trading in the green today.

• The Dow Jones is gaining about 0.3%, the S&P 500 is up 0.8%, but the tech-heavy Nasdaq 100 remains the growth leader, rising by around 1.2%.

• The improvement in sentiment is driven, among other things, by a rebound in the semiconductor sector, which is recovering some of its recent losses, even though the gains on US indices are taking place in the shadow of intensifying exchanges of fire between the US and Iran.

• Shares of US semiconductor manufacturers rebounded from earlier declines, following strong gains by Chinese companies in the sector.

• Investors took this as a signal of sustained demand for artificial intelligence-related technologies, which improved sentiment around the industry and supported shares of companies such as Micron, Intel, AMD, and Marvell.

• In the semiconductor sector, investors' attention was drawn to Micron's decision to increase its investment plans in the US to over $250 billion by 2035.

• The funds are to be allocated to expanding domestic semiconductor memory production, including HBM technology used in AI infrastructure, through the construction of new plants in New York, Idaho, and Virginia, creating tens of thousands of jobs.

• Micron's investments are a response to skyrocketing demand for memory used in AI data centers and US efforts to supply chain independence from Asia.

• Information regarding Meta Platforms was well-received, as the company plans to start production of its own AI chip as early as September and double its computing power to reduce dependence on third-party chip suppliers.

• The sector is also supported by the planned US debut of SK Hynix, which could achieve a valuation of over $26 billion and become one of the largest IPOs in history.

• Gains dominated European trading floors today, with the exception of the UK market, where the FTSE 100 retraced by just under 0.2%.

• Most major indices in Europe ended the session in the black – the German DAX gained about 0.8%, and the Spanish IBEX 35 rose 1.1%, supported by improved sentiment in global markets.

🌍 Geopolitics

• Geopolitical tensions in the Middle East remain a major source of risk for financial markets.

• The US and Iran exchanged attacks, which once again increased tension in the region and cast doubt on the further progress of fragile peace talks.

• Washington carried out a series of airstrikes on Iranian military targets, while Tehran responded with missile and drone strikes on US bases in Bahrain, Qatar, Kuwait, and Jordan, raising fears of a broader regional confrontation.

• The biggest risk point remains the Strait of Hormuz — one of the most important oil and LNG transport routes in the world, where potential disruptions to shipping have increased pressure on energy markets, raising concerns over rising commodity prices and renewed inflationary pressure.

• Gulf states, including Qatar, called on both sides to return to diplomatic dialogue, stressing the need to protect regional stability and energy security.

• Behind-the-scenes mediation efforts by third countries are underway, aiming to bring the US and Iran back to the negotiating table, limit further escalation, and reduce the negative impact on international trade.

• Iranian Foreign Minister Abbas Araghchi stressed that Iran retains the right to self-defense in the event of further US military action and will respond to subsequent actions by Washington, while seeking diplomatic support from regional states.

• President Donald Trump reported that Iran had contacted the US and expressed readiness to reach a deal despite the recent military escalation.

• Trump's statement came after US forces conducted strikes on approximately 170 Iranian targets (including air defense systems, missile and drone warehouses, and Islamic Revolutionary Guard Corps units) in response to previous Iranian attacks on three tankers.

• Trump described the US actions as retaliation and warned that any further action would be met with a decisively stronger response, not ruling out further escalation but leaving the door open for a return to negotiations.

• Israeli Prime Minister Benjamin Netanyahu said that the war is not over yet and that new challenges are emerging for the country, pointing to the need to maintain high readiness of the army and air force in the face of further threats from Iran and Tehran-backed groups.

📊 Macroeconomics

• Macroeconomic data from the US brought a positive signal – the number of initial jobless claims fell to 215,000 in the week ended July 4.

• The reading indicates continued stability in the US labor market despite an earlier slowdown in the pace of hiring, and suggests the economy is in a phase of moderate employment growth with no signs of sharp deterioration.

• Better-than-expected data eased investors' concerns about the health of the economy, but the Federal Reserve continues to monitor the situation, as a stable labor market limits pressure for rapid interest rate cuts, especially with lingering inflationary risks.

🛢️ Commodities

• After recent dynamic gains, crude oil saw a correction today.

• Investors assume that despite the sharp exchange of fire, diplomatic channels remain open, and the current escalation may be an element of negotiating pressure rather than the start of a prolonged conflict.

• Precious metals performed well today – gold is gaining about 1.5% and testing the $4,150 per ounce level.

• Silver is rising close to 4%, approaching $61 per ounce, with these gains supported by increased demand for defensive assets due to geopolitical uncertainty.

🪙 Cryptocurrencies

• Digital assets are also booking a positive day.

• Bitcoin is up over 1% and testing the $68,000 level.

• Ethereum is rising by about 0.5%, hovering around $1,750.