The chip sector's strong performance on that day diverted attention from the renewed hostilities between the United States and Iran. The S&P 500 rose about 1%, buoyed by technology stocks.
A 5.2% climb was recorded by the Philadelphia Stock Exchange Semiconductor Index following a Nikkei report indicating TSMC will increase prices for certain services by as much as 10% in 2027. Micron Technology Inc. jumped 12%. Both AMD and Intel saw their stock prices climb more than 8%. Sandisk Corp. surged 14%, achieving its highest one-day gain in almost a month, and became the top performer in the S&P 500.
Strong trade numbers out of South Korea and Taiwan helped boost sentiment, increasing stock prices for Samsung Electronics and Taiwan Semiconductor Manufacturing Company.
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The reported TSMC price hike signals sustained demand for advanced chip manufacturing, reinforcing the sector's pricing power and profitability outlook. This development, combined with robust export data from key Asian economies, provided a catalyst for the rally.
The rally overshadowed worries about the US-Iran conflict. Donald Trump downplayed the likelihood of quick negotiations with Iran as both parties continued military exchanges.
Not everything rallied. Danaher Corp. dropped 11% after providing a third-quarter core revenue growth forecast that came in below the consensus analyst expectation. Equifax Inc. declined 3.9% after cutting the upper bound of its full-year adjusted EPS guidance while raising the lower bound.
Halliburton Co. fell 5.5% after reporting second-quarter adjusted operating profit below the average analyst projection. Despite posting earnings that exceeded expectations, Charles Schwab Corp. saw its stock slide 2.5%.
About one-fifth of S&P 500 companies by market capitalization are scheduled to announce earnings this week, among them Alphabet Inc. and Intel. Alphabet and Tesla will report on Wednesday, with Intel following on Thursday. These earnings will provide investors with better insight into how artificial intelligence investments are transforming the technology sector. Intel has announced additional job cuts aimed at lowering expenses and restructuring its crucial data center unit.
The Federal Reserve is observing a blackout period before its July 29 rate decision, and no major economic data is due.
Rob Haworth, US Bank Asset Management's senior investment strategy director, said: "Investors are becoming more selective toward companies tied to artificial intelligence after strong gains." He added, "Profit growth still anchors the longer-term market outlook."
The bottom line: According to HSBC strategist Max Kettner, a potential market pullback may result from stretched investor sentiment, waning fiscal stimulus, and uncertainty surrounding the US midterm elections; he advises equity holders to reduce their positions after the current earnings season concludes.
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