Wall Street Rebounds as Chip Stocks Rally and Iran-Israel Tensions Ease

U.S. stock markets closed mostly higher on Monday, recovering from a sharp sell-off in the previous session as investors welcomed a rebound in semiconductor stocks and signs of easing tensions between Iran and Israel.

The S&P 500 rose 0.3% to finish at 7,404.73, while the Nasdaq Composite gained 0.9% to close at 25,929.66. The Dow Jones Industrial Average edged down 0.2% to 50,785.52. The market recovery followed Friday’s steep decline, when the S&P 500 suffered its worst performance of the year and the Nasdaq recorded its biggest daily loss in more than twelve months.

Investors had reacted negatively to a stronger-than-expected U.S. jobs report, which reduced expectations for Federal Reserve interest rate cuts. Higher Treasury yields put pressure on growth and technology stocks, contributing to the broad market decline. However, analysts believe the recent pullback represents a healthy correction rather than the start of a prolonged downturn.

Market attention is now shifting to key U.S. inflation data. The Consumer Price Index (CPI) and Producer Price Index (PPI) reports are scheduled for release this week and could influence future Federal Reserve policy decisions. Economists expect rising energy costs, driven by elevated oil prices, to play a major role in inflation trends.

Geopolitical developments also remained in focus. Over the weekend, Iran and Israel exchanged military strikes, raising concerns about a wider regional conflict. However, both countries later indicated that military operations had been suspended for the time being. U.S. President Donald Trump publicly urged both sides to pursue an immediate ceasefire, helping calm investor fears.

Oil prices initially surged amid concerns over supply disruptions linked to the ongoing closure of the Strait of Hormuz. Brent crude briefly climbed above $98 per barrel before easing to around $94.40 after announcements from both governments signaled a pause in hostilities.

Technology shares led Monday’s gains. The Philadelphia Semiconductor Index jumped 5.6%, with Intel, Micron, and KLA posting strong advances. Marvell Technology surged 9.6% after confirmation that it will join the S&P 500 index. Eli Lilly gained 1.5% following positive clinical trial results, while Apple slipped 1.9% after investors reacted cautiously to announcements made during its Worldwide Developers Conference.

Despite ongoing concerns about inflation, interest rates, and geopolitical risks, investors remain optimistic that strong corporate earnings and resilient economic growth will continue supporting U.S. stock market performance in 2026.