Technology Rally Lifts US Stocks Despite Hawkish Fed Concerns

US equities finished the holiday-shortened trading week on a positive note, recovering from a sharp midweek sell-off as investors returned to technology and semiconductor stocks despite renewed concerns about the future path of US interest rates.
The rebound came after Federal Reserve projections unsettled markets earlier in the week, revealing that some policymakers remain open to raising interest rates before the end of the year if inflationary pressures re-emerge. The prospect of tighter monetary policy initially sparked broad-based selling across Wall Street, but buyers stepped back into the market as the week progressed.
The Dow Jones Industrial Average edged up 0.1% during Thursday's session, helping the index secure a weekly gain of 0.7%. The broader S&P 500 rose 1.1% on the day and finished the week higher by 0.9%, while the Nasdaq Composite outperformed with a 1.9% rally in the final session, extending its weekly advance to 2.4%.
Trading volumes were lighter than usual ahead of the Juneteenth holiday, with both US stock and bond markets scheduled to remain closed on Friday. Nevertheless, investor sentiment improved markedly as technology shares regained momentum following the previous session's sharp decline.
Semiconductor stocks led the recovery after comments from US President Donald Trump suggested that Apple had agreed to work with Intel on designing and manufacturing chips within the United States. Although neither company officially confirmed the arrangement, the announcement triggered a strong reaction across the sector.
Intel shares surged 11%, making the company one of the best-performing stocks of the session. Optimism quickly spread throughout the semiconductor industry, with Micron Technology climbing approximately 9% and Marvell Technology gaining around 8%. The rally reflected renewed investor confidence in the long-term growth prospects of the US technology sector despite lingering concerns over interest rates.
Not all high-profile stocks participated in the advance. SpaceX shares extended their post-IPO pullback, declining for a second consecutive session as investors locked in profits following the stock's strong debut. The shares fell 5% on Wednesday and a further 4% on Thursday. Despite the recent weakness, some analysts believe the company could attract additional demand if it is added to major market indices that are tracked by large institutional funds.
In commodity markets, oil prices recovered from early-session lows after geopolitical tensions continued to ease. The market reacted positively after President Trump formally signed a memorandum of understanding aimed at ending the conflict with Iran and reopening the Strait of Hormuz, a critical shipping route for global energy supplies.
West Texas Intermediate crude settled near $76.75 per barrel, while Brent crude held around $79.50 per barrel. The reopening of the strategic waterway eased concerns about supply disruptions that had previously supported higher oil prices.
Meanwhile, the US Treasury market stabilized after the previous day's volatility. The yield on the benchmark 10-year Treasury note slipped to 4.46%, retreating from 4.50% following the Federal Reserve's updated interest-rate and inflation forecasts. Treasury yields remain closely watched as they influence borrowing costs across the economy, including mortgage rates and consumer lending.
Cryptocurrency markets struggled to maintain the strong momentum seen earlier in the week. Bitcoin traded near $63,100 late in the session after briefly falling to a weekly low around $62,400. The digital asset had rallied above $67,000 on Monday as geopolitical tensions eased, but profit-taking and concerns over monetary policy have since weighed on prices.
Precious metals also came under pressure as investors shifted toward risk assets and the US dollar strengthened. Gold futures fell more than 3% to approximately $4,235 per ounce, while the US Dollar Index rose 0.7% to 100.80, reflecting renewed demand for the greenback.
Market Outlook
With US financial markets closed for the holiday, trading activity is expected to remain subdued in the immediate term. However, investors will continue to assess the implications of the Federal Reserve's latest projections and the possibility that policymakers could maintain a restrictive stance for longer than previously anticipated.
Technology and semiconductor stocks are likely to remain at the center of market attention after their strong rebound, particularly as investors evaluate whether renewed enthusiasm for artificial intelligence and domestic chip manufacturing can offset concerns about higher interest rates.
Oil markets will remain sensitive to developments surrounding the Strait of Hormuz and global supply conditions, while gold is expected to continue reacting to movements in the US dollar and Treasury yields. In cryptocurrencies, Bitcoin may remain volatile as traders balance profit-taking activity against improving risk sentiment and easing geopolitical concerns. Overall, markets appear poised to remain highly responsive to both monetary policy signals and developments across the technology sector.