Nasdaq Surges 0.81% as Tech Stocks Rebound; US-Iran Truce Boosts Market Sentiment

Mumbai, June 29: The Nasdaq Composite opened higher on Monday, recovering from a sharp sell-off last week, as investors returned to beaten-down technology and semiconductor stocks following reports that the United States and Iran have agreed to halt recent hostilities.

The tech-heavy index climbed 0.81% to trade at 25,484.94 in early trading, while the S&P 500 advanced 0.55% to 7,394.38 and the Dow Jones Industrial Average gained 0.35% to 52,056.30.

Tech Rebound Drives Nasdaq Higher After 4.6% Weekly Loss

The technology sector led Monday’s rally as bargain hunters selectively purchased AI-related stocks following last week’s sharp rotation. The Nasdaq Composite had fallen 4.6% over the previous five sessions, marking its worst weekly performance in months, while the S&P 500 declined nearly 2%. The Dow Jones Industrial Average, which has lower exposure to technology names, bucked the negative trend last week with a 0.6% gain.

Nvidia shares broke their five-day losing streak, surging over 1% to $194.78, while Meta Platforms gained more than 3%, Amazon.com rose nearly 5%, and Alphabet added approximately 3.5%. Tesla shares climbed 2.97%, while Microsoft advanced 0.90% to $378.63. Apple rose 0.24% to $284. The Magnificent Seven stocks collectively drove the Nasdaq’s recovery after five of the seven closed higher on Friday.

US-Iran Truce Eases Geopolitical Tensions, Oil Rises 1.4% to $70.21

The primary catalyst behind Monday’s risk-on sentiment was a breakthrough in Middle East tensions. According to a senior US official, the United States and Iran have agreed to stop mutual attacks and will hold talks in Doha, Qatar, on Tuesday to resolve the Strait of Hormuz dispute. President Donald Trump confirmed the development on Truth Social, announcing that both sides would stand down for now and allow commercial vessels to move freely through the strategic waterway.

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The agreement follows a weekend of military exchanges that began on Thursday when Iran targeted a container ship, prompting US strikes on Iranian military targets on Friday. President Trump had threatened to annihilate Iran, stating on Truth Social that United States aircraft had struck Iranian missile and drone storage locations for violating the ceasefire agreement.

Oil prices edged higher following the weekend escalation, with West Texas Intermediate futures rising 1.4% to $70.21 per barrel, while Brent crude gained 1.07% to $72.76. However, prices remained near four-month lows as traders assessed whether the pause in hostilities would hold. Shipping traffic through the Strait of Hormuz had picked up significantly last week, adding millions of barrels of crude to global markets.

Comcast Shares Soar 10% After Announcing NBCUniversal Spin-Off Plan

Comcast shares surged 10% in early trading after the company announced plans to split its media and technology businesses into two separate publicly traded companies. NBCUniversal, which includes NBC, Peacock, Sky, Universal Studios, and theme parks, will become an independent company within about a year.

After the separation, Comcast will focus on internet and wireless services through its Comcast and Xfinity brands while retaining a 19.9% stake in NBCUniversal. The restructuring, subject to regulatory and board approvals, will give existing shareholders stock in both companies. Investors welcomed the move, sending Comcast shares into positive territory for the year.

SpaceX to Join Nasdaq-100 Index, Shares Rise 2.5%

SpaceX shares gained 2.5% following Nasdaq’s announcement that Elon Musk’s satellite company will be fast-tracked into the Nasdaq-100 Index effective July 7. The inclusion is expected to generate significant demand from passive tracking funds, which will be forced to rebalance and purchase billions of dollars in stock.

Musk also revealed that Grok 4.5 is now in beta testing at SpaceX and Tesla, with plans to release one new AI model per month for the remainder of the year. The news comes as the company continues to expand its Starlink satellite internet service and prepare for future space missions.

$300 Billion Pension Rebalancing Adds Selling Pressure This Week

The final two trading days of the first half of 2026 are expected to see significant passive selling as large US pension funds conduct semi-annual rebalancing. An estimated $300 billion in US equity sales is concentrated on Monday and Tuesday as funds follow fixed asset-allocation targets, typically 60% stocks and 40% bonds.

Since stocks have outperformed bonds significantly in the first half of 2026, funds must reduce equity positions and increase bond holdings to restore their target weights. This mechanical selling pressure could weigh heavily on semiconductor and other technology-related stocks, with potential spillover effects into Asian markets.

Alphabet Replaces Verizon in Historic Dow Jones Rebalancing

Monday marks the 54th adjustment in Dow Jones Industrial Average history, with Google parent Alphabet officially joining the index, replacing telecom giant Verizon. The move is widely seen as a symbolic embrace of the AI era, reflecting the growing importance of technology companies in the broader economy.

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Meanwhile, Nike—currently the worst-performing Dow component—has been formally placed on watch for potential removal. The athletic wear giant’s shares have struggled in recent months, raising questions about its continued inclusion in the 30-stock benchmark.

Micron Extends Losses Despite Strong AI Demand Outlook

Micron Technology extended its decline, falling over 4% to $1,085.65, even as analysts at Trivariate Research argued that the memory chip maker’s rally still has room to run. Founder Adam Parker compared not owning Micron today to how they felt about Nvidia 2.5 years ago, suggesting investors are too quick to dismiss AI semiconductor gains as just another bubble.

Parker noted that Micron has transformed from being perceived as a low-quality commodity producer to a company guiding toward $50 billion in quarterly revenue at 86% gross margins. He described this as not just the strongest profit cycle in DRAM history but possibly the greatest in the history of all cyclicals.

However, Bank of America maintained that Micron’s strong results reinforce the view that the global memory chip industry is in a “super-cycle,” even as the stock faced selling pressure on Monday.

Labour Market Data and Fed Commentary in Focus This Week

For investors, the focus this week is on key U.S. economic data and Federal Reserve commentary. The June nonfarm payrolls report, due Thursday ahead of the Fourth of July holiday, is expected to show 110,000 new jobs, with unemployment steady at 4.3%. Federal Reserve Chair Kevin Warsh will speak at the ECB’s Sintra forum, while markets currently see a 77% chance of a 25-basis-point or larger rate hike by year-end. Richmond Fed President Tom Barkin also noted that inflation remains elevated but could ease in the comin

Semiconductor Stocks Show Mixed Performance as AI Investment Surges

The semiconductor sector displayed mixed performance on Monday as investors weighed AI-driven demand against valuation concerns. Broadcom declined 1.04% to $133.72, while Advanced Micro Devices fell 4.57% to $513.81. Applied Materials gained 2.67%, and KLA Corporation rose 1.31%.

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UBS raised its price target on Marvell Technology to $340 from $230, implying a potential upside of 27.5% from Friday’s close. The bank believes demand for Compute Express Link products is set to surge as AI and data centre workloads require higher-capacity memory systems, which should boost Marvell’s shares as the company increasingly shifts focus to CXL products. Marvell Technology has surged 213% in 2026, vastly outperforming the S&P 500.

Memory chip stocks showed mixed performance, with Western Digital gaining 1.59% and Seagate adding 0.39%, while SanDisk fell over 5% to $1,981.

BIS Warns of AI-Driven Market Risks Amid Tech Concentration

The Bank for International Settlements warned that AI-related stock valuations may have become stretched, and a sharp correction in AI stocks could spill over into broader financial markets. The Basel-based institution noted that concentrated investment in AI increases systemic risks if growth slows.

Bank of America, however, upgraded its global growth forecasts, now seeing the world economy growing by 3.2% in 2026 and 3.5% in 2027, with AI in the driver’s seat. The bank’s economists attributed the upward revision to the AI-driven export cycle in Asia and the AI investment boom in the United States, while lower oil prices boost growth mildly in developed markets in 2027.

AI investment has increasingly dominated US final domestic demand growth, taking over from the traditionally leading consumer sector, according to data published by the bank.

The Nasdaq Composite opened higher by 0.81% at 25,484.94, while the S&P 500 and Dow Jones gained 0.55% and 0.35%, respectively. Technology stocks led the recovery after last week’s 4.6% decline, with Comcast surging 10% on restructuring news and SpaceX rising 2.5% ahead of its Nasdaq-100 inclusion. Oil prices traded at $70.21 per barrel amid easing geopolitical tensions following the US-Iran truce.

Source

• https://www.nasdaq.com/

• spglobal.com/spdji/en/indices/equity/sp-500/

• https://www.dowjones.com/