Nasdaq tech leads strong Wall Street rebound after Iran ceasefire deal
Wedbush analysts said the collaboration makes strategic sense, noting that “a tie-up with Intel to build the proposed Terafab chip complex makes significantly more sense than Elon’s companies attempting to develop 2nm process technology on their own.” However, they warned that Terafab’s customer base—including Tesla’s AI hardware ambitions, xAI’s data center needs, and SpaceX’s satellite chips—is inherently riskier than Intel’s traditional clients, such as hyperscale cloud providers and major chip design houses. Investors have rushed to buy the dip in the wake of the ceasefire announcement, according to Chris Beauchamp, Chief Market Analyst at online trading platform IG. “The old adage suggests investors should buy on the sound of cannon, and sell on the sound of trumpets. But over the past six weeks investors have done the opposite," Beauchamp commented. "Having cut back on stocks when the war erupted they are now rushing back to buy, and with the S&P 500 now trading at a much lower valuation the logic makes sense. True, there have been sporadic attacks throughout the day, but if the US is really poised to take its toys and go home, then the real driver of any further conflict is removed. "Now we just have to wait to see if the latest round of negotiations bear fruit.” Global markets climbed on news of a temporary ceasefire between the United States and Iran, though the rally may be premature, according to Nigel Green, CEO of deVere Group. The rebound in equities comes after US President Donald Trump agreed to a conditional two-week pause in military action with Iran, tied to the reopening of the Strait of Hormuz. Under the arrangement, Iran has said it will permit two weeks of safe passage through the Strait of Hormuz—through which roughly 20% of global oil supply flows—while the United States has committed to halting strikes over the same period. However, the ceasefire remains time-limited and contingent on compliance from both sides, underscoring the potential for renewed volatility in global markets. But Green warned that investor optimism following the announcement could be misplaced given the fragile nature of the agreement. “A 15% collapse in oil in less than a week and a near 4% jump in European equities tells you exactly what markets are doing. They’re pricing in a clean de-escalation. But that assumption looks far too optimistic," Green cautioned. "This is a 14-day window, not a permanent policy shift. You have a fifth of the world’s oil supply moving through a corridor that is still effectively under the influence of one of the parties to the conflict. That’s not stability.” Wall Street stocks have opened firmly higher, led by the Nasdaq, gaining 2.9% and the small cap Russell 2000, with a 3.45% jump. The blue chip Dow Jones started up 2.8%, while the S&P 500 rose 2.3%. Gains on the Nasdaq 100 were driven by semiconductor and tech stocks, with Western Digital, Lam Research, Axon Enterprise and ASML all up around 9%, alongside strength in Micron, Applied Materials and KLA. Among the Mag 7 giants, moves were broadly positive, with Meta Platforms up almost 5%, Alphabet rising around 4%, Amazon up nearly 4% and Microsoft and Nvidia also higher, while Apple lagged with a more modest gain of around 1%. US stocks are set for a sharply higher open on Wednesday, with futures pointing to strong gains after easing tensions in the Middle East lifted sentiment. Nasdaq futures led the move, up 3.5%, while the Dow Jones and S&P 500 were both called 2.8% higher. In the previous session, the Nasdaq and S&P had both edged up around 0.1%, while the Dow had dipped 0.2% on tentative hopes for diplomatic progress in the Gulf. Then, around two hours before his 8pm EST deadline, Donald Trump announced that a two-week ceasefire deal had been agreed between the US and Iran. The US President posted that the deal was “subject to the Islamic Republic of Iran agreeing to the complete, immediate, and safe reopening of the Strait of Hormuz”. Iran's foreign minister said the country's forces will “cease their defensive operations” if attacks stop and that "safe passage" through the Strait would be possible for two weeks. Trump said that a 10-point proposal had been received from Tehran that was a "workable basis on which to negotiate" towards a more durable peace agreement. US WTI crude oil futures fell over 17% to $93.25 a barrel, with Brent crude down over 15%. Metals prices bounced, with gold, silver and copper all climbing. Shipping has resumed through the Strait of Hormuz, with maritime data confirming early vessel movements returning to the key route for global oil and gas flows, further easing concerns over supply disruption. Lower geopolitical risk has improved confidence across equities, with growth-focused names expected to lead early gains, reflected in the stronger move in Nasdaq futures. Asian and European markets surged, with Japan's Nikkei and India’s Sensex gaining 5.4% and 4%, while the DAX jumped 5.3% in Germany and the FTSE 100 climbed 3.1% in London. Market analyst Kenny Polcari was one of many who thought that while Trump's threats were "dramatic (and stupid)" he had a history of making "bellicose statements before...It’s his style – maximum pressure and maximum drama". He said the ceasefire is "only a first step, but it is a step and there is much more to come". As for markets, he said the early strength was being seen in tech and small and mid-caps "as investors breathe a bit easier after the ceasefire headlines", with tech having "become oversold in the recent pullback, pushing valuations in many names back toward more attractive levels".
