U.S. Stock Market Trends (June 19): The U.S.-Iran Deal Implementation Premium Fades, Chips Lead Again to New Highs, and the Energy Sector Drops the Most

Writing: Trend Research

Thursday, the Strait of Hormuz opened, and chip stocks hit a record high.

The US-Iran temporary agreement was officially signed in Geneva, and three Saudi supertankers crossed the Strait of Hormuz on the same day. The FOMC hawkish shock was subdued by geopolitical positive news. The S&P rose over 1%, the Nasdaq nearly 2%, reversing two consecutive declines, the Dow Jones reached a new high for the third day this week, and the Philadelphia Semiconductor Index surged over 6% in a single day to a new all-time high. Energy stocks, which fell collectively with oil prices, were the only losers across the day.

Market Performance

The S&P 500 closed up 1.08% at 7,500.58 points, the Nasdaq rose 1.91% to 26,517.93 points, the Dow increased 0.14% to 51,564.70 points, and the Russell 2000 led the gains with a 2.12% rise to 2,979.77 points. The gains decreased from small to large caps, with the Dow almost unchanged, indicating that the main drivers of the rebound were the high-beta stocks that had fallen the most in the past two days; defensive and blue-chip stocks did not keep pace this day. The US-Iran news was fully priced in before the market opened, and the indices maintained a steady upward trend throughout the day, closing with most of yesterday’s FOMC shock losses recovered.

Trump confirmed early in the morning on Truth Social that Apple had reached a design and manufacturing partnership with Intel, initially taking on mature process chips for iPads and older iPhone models, with flagship products still supplied by TSMC. The negotiations had been ongoing for over a year, and Intel’s foundry business gained its most significant external client through this, while Apple diversified its dependence on TSMC. Both companies did not respond officially; the market is pricing in the directional significance.

Trump also mentioned in the same post that Nvidia agreed to produce the first batch of chips at Intel, and Elon Musk promised to co-build the largest wafer fab in history, TerraFab. Apple’s cooperation is the third piece in Intel’s foundry expansion. Intel’s stock rose about 10.5% to $133.82. Apple plans to raise prices due to rising memory and storage chip costs, with SanDisk up over 11% and Micron nearly 9%, benefiting the entire storage industry chain. Nvidia rose nearly 3%, and the Philadelphia Semiconductor Index surged over 6% to a new all-time high, with all segments—from equipment to storage to computing power—rising across the board. The long-term logic of AI capital expenditure remains valid after the hawkish dot plot.

SpaceX fell 3.56% to $185.00, closing down for the second consecutive day, with a total decline of about 8.3% over two days. Bloomberg reported that the company is preparing to issue at least $20 billion in investment-grade dollar bonds to repay bridge loans maturing in 2027. Concerns about potential equity dilution, combined with the FOMC hawkish shock, created a double pressure leading to two consecutive declines. The stock has still gained nearly 15% this week since its IPO debut, 37% above the issue price, but short-term pressure has not yet dissipated.

The energy sector led the 11 major sectors of the S&P down, with WTI crude oil falling about 2% to $74.29 per barrel. ExxonMobil and Chevron both declined collectively. The reopening of the Strait of Hormuz released all geopolitical premiums, and the previous 20-40% gains of the year began to loosen. The energy sector, which was the biggest winner this week, turned into the biggest loser.

Technology, consumer discretionary, and industrial sectors led the gains, with funds flowing from defensives and energy into the computing chain. Yesterday’s outflow from tech stocks due to the FOMC shock partially reversed today on geopolitical positive news. The rapid rotation indicates that these funds have not truly exited but are waiting for a reason to re-enter.

Macro and Outlook

The VIX plummeted 11.06% to close at 16.40, with the panic caused by the FOMC yesterday largely dissipating within a day, indicating that the market’s pricing of the hawkish dot plot is more of a technical hedge than genuine risk aversion. The 10-year US Treasury yield slightly declined to around 4.445%, while the 2-year remained above 4.18%. The market has not re-priced September rate hikes, only temporarily suppressed by improved risk appetite and reduced volatility. Gold fell to $4,210 per ounce, with silver also declining. The US dollar index slightly retreated but remains high. Bitcoin (CoinGecko) closed near $64,026, and Ethereum around $1,734. The crypto market showed no obvious reaction to geopolitical positives, and hawkish expectations remain suppressed. WTI crude oil closed at $74.29 per barrel, near a three-month low.

Next week, PCE data, Flash PMI, and Micron’s earnings will be released successively. Micron’s guidance is the most direct indicator of AI computing demand; a previous quarter’s below-expected guidance caused a single-day plunge in the semiconductor sector. The Russell Reconstitution will take effect at the close next Friday, which will trigger a significant increase in trading volume due to mechanical rebalancing, and small-cap stocks’ volatility will rise accordingly.

Trend Perspective

Thursday’s rebound had two legs: US-Iran signing releasing geopolitical premiums, and chip stocks confirming the AI theme with actual gains. Both logics are valid, but their durations differ. The geopolitical premium is a one-time event; once the signing is completed, it’s considered fulfilled. If Iran repeats actions later, the market will react faster and more aggressively than the first time. The logic of chip stocks is more durable; the rally in Intel, SanDisk, and Micron indicates industry chain breadth, and the pricing of AI capital expenditure has fundamental support. Behind SpaceX’s two-day decline lies a new variable: once the $20 billion bond issuance is finalized, financing pressure and dilution expectations will become ongoing price pressures, not just valuation adjustments. Next week’s PCE will be a key test; if the data again exceeds expectations, the probability of a September rate hike will shift from a possibility to consensus, and Thursday’s rebound will be just a short-term correction. If the data softens, the market will rapidly reprice for rate cuts, faster than anyone expects.