US stocks staged a dramatic recovery on Monday, with the Nasdaq jumping 457.66 points (1.78%) to 26,167.09 by 11:22 a.m. ET, according to reports from The Financial Express. The S&P 500 gained 79.37 points (1.07%) to 7,463.11, while the Dow Jones Industrial Average rose 183.48 points (0.36%) to 51,050.26. This marked a sharp reversal from Friday's session, when the Nasdaq had plunged 4.18% in its worst one-day drop since April 2025, wiping out billions of dollars in market value. The Philadelphia Semiconductor Index surged more than 6% and marked one of its strongest sessions of the year, reflecting investors' renewed appetite for technology and growth stocks. As per Live Mint, S&P 500 futures gained 0.4% and Nasdaq 100 futures climbed 0.8% on Tuesday, pointing to further strength in technology stocks after last week's pullback.
The primary catalyst for Monday's rebound was renewed confidence in artificial intelligence stocks, as reported by The Financial Express. After Friday's selloff, investors stepped back into the market, encouraged by Nvidia CEO Jensen Huang's comments that the pullback was a buying opportunity rather than a reason to worry. Intel surged over 11%, Micron gained about 9%, and Nvidia advanced more than 1.5%, with the Philadelphia Semiconductor Index leading gains across the sector. Technology stocks had been hit hardest in Friday's selloff due to concerns over high valuations and weaker-than-expected results from chipmaker Broadcom. However, the latest rally was particularly strong, with the semiconductor index posting one of its strongest sessions of the year. According to Live Mint, Micron Technology advanced for the second straight session, gaining 4% in pre-market trade after staging a 10% rebound on Monday, while Qualcomm was also up 3% in early trading. Tech majors, specifically chipmakers like Nvidia Corp. and Micron Technology corrected from their rout and rose over 1% at open, with Intel Corp. topping the chipstock rally after rising nearly 11% to $118.5 after a double upgrade from BofA.
The biggest driver behind Monday's rally was the return of the AI trade after Friday's technology selloff, with investors viewing lower prices as an opportunity rather than a warning sign. Intel became one of the day's standout performers following reports that Google may use the company to manufacture millions of Tensor Processing Unit (TPU) chips. According to industry estimates, Google could produce over 6 million TPU chips through 2027-28, with Intel potentially manufacturing approximately 3 million units. This development reignited investor optimism around Intel's role in the next phase of AI infrastructure expansion, with the potential AI-related revenue opportunity running into billions of dollars. As per Live Mint, Nuvalent surged 39% after UK-based biopharmaceutical company GSK announced an agreement to acquire the company for $10.6 billion, while OpenAI has confidentially filed for a US initial public offering, joining rival Anthropic in moving towards public markets.
Markets received additional relief as US President Donald Trump called for an immediate ceasefire between Israel and Iran after fresh missile exchanges threatened regional stability. According to The Financial Express, Trump issued direct appeals through his Truth Social platform, stating "Israel and Iran must immediately stop shooting." He noted that "both sides, Israel and Iran, are looking to do an immediate CEASEFIRE!" and that "final negotiations on 'Peace' are proceeding, subject to ignorance or stupidity getting in its way." The latest violence marks the first direct exchange of fire between Israel and Iran since a ceasefire agreement was reached in April, with both sides trading strikes as regional tensions surged. As per Live Mint, tensions eased after Iran's military reportedly said it would halt offensive operations following an appeal from US President Donald Trump, though it warned that harsher attacks could follow if Israel resumed strikes on Lebanon. Trump also renewed claims that a peace deal with Tehran is nearing completion. Rise in US market indices comes amid mixed signals regarding the Iran war. After conducting a round of attacks on Tehran, Donald Trump warned of fresh, harder strikes tonight; however, he followed it up by saying that he would 'rather have a deal'.
The conflict initially pushed oil prices sharply higher, with Brent crude briefly climbing above $98 a barrel overnight, as reported by The Financial Express. However, as tensions appeared to ease, prices pulled back significantly. Crude oil prices, which had jumped post Trump's declaration, slipped again with Brent Crude trading 1% lower at $92.2 per barrel and West Texas Intermediate down 0.7% to $89.2 per barrel, according to latest reports. The decline in oil prices mattered because higher oil prices can increase inflation, potentially limiting the Federal Reserve's room to lower interest rates. Lower oil prices helped calm inflation concerns because energy costs directly influence transportation, manufacturing and consumer prices, while the pullback removed one of the market's biggest near-term worries.
Stocks also received support from a slight drop in Treasury yields, with the yield on the benchmark 10-year US Treasury note falling to 4.51% from 4.55% on Friday, according to The Financial Express. Lower yields are generally positive for technology and growth stocks because they make future earnings more attractive to investors. However, inflation concerns have not disappeared, with Callie Cox, chief market strategist at Ritholtz Wealth Management, noting that "the stock market may be becoming a victim of its own success" and that growth strategies may be vulnerable if cost pressures stay elevated. The stronger labor market could keep Federal Reserve policymakers concerned about inflation, with the stronger May employment report adding to these concerns. On the currencies front, Dollar Spot Index rose 0.1%, euro was little changed at $1.1533, British pound fell 0.1% to $1.3354, and Japanese yen was little changed at 160.53 per dollar, while Bitcoin, the largest traded cryptocurrency, rose 1.5% to $62,698.55.
