Tech Rebound Lifts Markets as Geopolitical Risks Ease

US equities closed the holiday-shortened week higher, staging an impressive recovery from the midweek sell-off sparked by the Federal Reserve’s hawkish messaging. Investors returned to growth-oriented sectors, particularly technology and semiconductors, while easing geopolitical tensions in the Middle East helped improve overall market sentiment.
The rebound followed a volatile trading period in which Federal Reserve officials signaled that additional interest rate hikes remain possible should inflation prove persistent. Despite those concerns, buyers returned aggressively to risk assets, allowing major indices to finish the week in positive territory.
The Dow Jones Industrial Average edged up 0.1% on Thursday, securing a weekly gain of 0.7%. The broader S&P 500 advanced 1.1% during the session and ended the week 0.9% higher. Technology stocks led the recovery, pushing the Nasdaq Composite up 1.9% on the day and 2.4% for the week.
Semiconductor Rally Drives Risk Appetite
The technology sector was the standout performer as investors piled back into semiconductor names. Market enthusiasm was fueled by comments from Donald Trump suggesting that Apple could cooperate with Intel on domestic chip design and manufacturing initiatives.
Although neither company formally confirmed such an arrangement, Intel shares surged approximately 11%, becoming one of the strongest performers in the market. The optimism spilled across the semiconductor industry, lifting shares of companies such as Micron Technology and Marvell Technology, which gained roughly 9% and 8%, respectively.
The strong performance highlighted investors’ continued preference for AI-related infrastructure, semiconductor manufacturing, and advanced computing themes despite uncertainty surrounding monetary policy.
SpaceX Gives Back IPO Gains
Meanwhile, shares of SpaceX continued to retreat after an explosive post-listing rally. The stock fell 5% on Wednesday and another 4% on Thursday as investors took profits following its strong debut.
Despite the pullback, market participants remain focused on the possibility of rapid inclusion in major benchmark indices, a development that could attract significant institutional buying from passive investment funds.
Oil Stabilizes as Hormuz Concerns Ease
Energy markets remained highly sensitive to developments surrounding Iran and the Strait of Hormuz.
Crude prices recovered from early-session lows after reports that a memorandum of understanding had been signed to help end hostilities involving Iran and facilitate the reopening of key shipping routes through the Strait of Hormuz. The prospect of normalized maritime traffic reduced fears of prolonged supply disruptions and helped improve confidence in global economic activity.
West Texas Intermediate crude settled near $76.75 per barrel, while Brent crude traded around $79.50 per barrel. Although prices rebounded from intraday lows, the broader trend reflected a reduction in the geopolitical risk premium that had previously supported oil markets.
Bonds, Dollar, and Gold Reflect Fed Concerns
The bond market remained focused on the Federal Reserve’s policy outlook. The yield on the benchmark 10-year US Treasury note eased to 4.46% after reaching 4.50% in the previous session following the release of updated Fed projections.
Despite the slight decline in yields, investors continued to price in a higher-for-longer interest rate environment. That expectation supported the US dollar, with the US Dollar Index rising 0.7% to 100.80.
The stronger dollar and elevated rate expectations weighed heavily on precious metals. Gold futures fell more than 3% to approximately $4,235 per ounce as investors reduced exposure to non-yielding assets.
Bitcoin Holds Above Weekly Lows
Cryptocurrency markets experienced renewed volatility as traders balanced improving geopolitical sentiment against uncertainty surrounding monetary policy.
Bitcoin traded near $63,100 late in the session after briefly falling to a weekly low around $62,400. Earlier in the week, Bitcoin had climbed above $67,000 amid optimism that geopolitical tensions were beginning to ease.
The pullback suggests investors remain cautious about committing fresh capital until there is greater clarity regarding both Federal Reserve policy and broader risk sentiment.
Market Outlook
Markets enter the new week facing two powerful and opposing forces: improving geopolitical conditions and persistent monetary policy uncertainty.
Technology and semiconductor stocks are likely to remain at the center of investor attention after last week's strong rebound. Continued strength in AI-related spending themes could provide support for the Nasdaq and broader equity markets, particularly if bond yields remain stable.
Oil prices may struggle to sustain recent highs if progress continues toward restoring normal shipping flows through the Strait of Hormuz. A further easing of supply concerns would reduce the geopolitical premium embedded in crude prices, though any disruption to implementation could quickly reverse sentiment.
Gold remains vulnerable to a stronger dollar and elevated rate expectations. Unless Treasury yields fall meaningfully or geopolitical risks re-emerge, the precious metal could remain under pressure.
Bitcoin and the broader cryptocurrency market are likely to remain highly sensitive to movements in technology stocks and overall risk appetite. A decisive move back above recent resistance levels would be needed to restore bullish momentum.
For investors, the key indicators to watch will be US Treasury yields, dollar strength, developments in the Iran-Hormuz agreement, and signals from Federal Reserve officials. Together, these factors are likely to determine the near-term direction of equities, commodities, and digital assets