The S&P 500 Index (SPY) is up +0.47%, the Dow Jones Industrial Average (DJIA) is up +0.14%, and the Nasdaq 100 Index (QQQ) is up +1.55% in Thursday trading.
The primary catalyst behind the day’s gains is a blockbuster investor response to South Korean chipmaker SK Hynix listing American depositary receipts, which were more than seven times oversubscribed.
The US offering by SK Hynix is expected to raise approximately $24.5 billion, making it the second-largest capital raise by a foreign company, according to Bloomberg calculations.
Chipmakers and AI infrastructure stocks are leading the charge, with the iShares Semiconductor ETF (SOXX) closing up more than +2% on the session.
Lam Research (NASDAQ: LRCX) is up more than +10% to lead gainers in the S&P 500, while Applied Materials (AMAT) and KLA Corp (KLAC) are each up more than +9%.
ARM Holdings (ARM), Marvell Technology (MRVL), Micron Technology (MU), and Western Digital (WDC) are all up more than +7%, adding further weight to the sector’s strong showing.
Gains in the broader market come despite an escalation of hostilities in the Middle East, as the US and Iran traded attacks against each other for a second consecutive day.
The US military struck approximately 90 Iranian targets to degrade the country’s ability to attack commercial shipping in the Strait of Hormuz, while Iran responded by targeting US bases in Bahrain, Kuwait, and Qatar with drones and missiles.
On Wednesday, President Trump declared the ceasefire with Iran was over, raising the prospect of persistent regional hostilities that could threaten energy supply chains.
WTI crude oil (CLQ26) is up +0.61% on the day but remains below Wednesday’s two-week high, reflecting the market’s cautious assessment of supply disruption risk.
US labor market data is also providing support, with weekly initial unemployment claims unexpectedly falling by 2,000 to a six-week low of 215,000, compared to expectations of an increase to 217,000.
The outlook for corporate earnings is adding a bullish dimension, with Bloomberg Intelligence forecasts suggesting Q2 earnings may increase by +23%, close to Q1’s result of +30%, which was more than double the +12% analysts had originally expected.
AI infrastructure stocks are expected to contribute nearly 60% of the S&P 500’s earnings-per-share growth in Q2, according to the Bloomberg Intelligence forecasts.
Not every sector is sharing in the day’s gains, with software stocks under pressure for a second consecutive session, led by Palantir Technologies (PLTR) down more than -3% and Salesforce (CRM) down more than -2%.
International Business Machines (IBM) is down more than -2% after Starbucks said it was developing in-house tools with the help of artificial intelligence that could replace some software applications it buys from IBM.
Alnylam Pharmaceuticals (NASDAQ: ALNY) is up more than +12% to lead Nasdaq 100 gainers after rivals AstraZeneca and Ionis Pharmaceuticals slumped following a late-stage trial failure of their Wainua drug, which failed to prevent heart problems in patients.
PepsiCo (NASDAQ: PEP) is down more than -4% after reporting Q2 operating profit of $4.02 billion, falling short of the consensus estimate of $4.06 billion.
Trucking stocks are broadly higher after Citigroup upgraded the sector, with FedEx Freight Holding (FDXF) up more than +5% and Old Dominion Freight Line (ODFL) and Knight-Swift Transportation Holdings (KNX) each up more than +3%.
Markets are currently pricing in a 28% chance of a +25 basis point rate hike at the next FOMC meeting scheduled for July 28-29.
