Renewed demand for technology stocks propelled US stocks to new highs, amid growing optimism that Washington and Iran are seeking to extend a two-week truce.
S&P 500 futures rose slightly after the benchmark index closed above 7,000 points for the first time. Nasdaq 100 contracts rose 0.2% as Taiwan Semiconductor Manufacturing Co.’s strong revenue outlook eased resilience in demand for artificial intelligence chips. Meanwhile, Elon Musk’s team is requesting quotes for chip manufacturing equipment for its Terafab project, adding optimism to the technology sector.
Brent crude surpassed $96 a barrel as traffic through the Strait of Hormuz remains virtually paralyzed. Global bonds advanced, led by gains in Europe, where central bankers signaled they were in no rush to raise interest rates. The dollar ended an eight-day streak of declines, while gold surpassed $4,800 per ounce.
Stock markets are extending their strong rally as signs of easing tensions in the Middle East, Combined with a new boost in optimism around artificial intelligence and corporate results, they have led investors to abandon cautious positions. Wall Street veteran Ed Yardeni noted that investors are putting aside the war in the Middle East and focusing on market fundamentals.
“History shows that geopolitical crises end up being great buying opportunities,” Yardeni told Bloomberg TV. “That’s the situation we’re in now, where investors are looking beyond the war.”
Technology stocks led gains in Europe, where the Stoxx 600 rose 0.2%. An indicator of the sector in Asia reached an all-time high, while Taiwan’s total market capitalization exceeded US$4.1 trillion, surpassing the United Kingdom.
“Tsmc describes AI demand as ‘extremely robust’, raising its capital spending to the upper end of a range of US$52 billion to US$56 billion, and noting that the next three years of investment will significantly exceed the previous three; that’s not the language of a near-peak cycle,” said Amanda Lyons, information technology sector head and head of research at Energy Group Capital.
Potential suppliers to Musk’s Terafab project, which aims to supply 1 terawatt of computing capacity annually, including Applied Materials and Lam Research, posted broad gains. Tsmc rose 1% in US pre-market trading after closing at a record high in Taipei, before erasing that gain. Microsoft stood out among the “Magnificent Seven” with an increase of 1.5%.
Tech stocks have been heavily bought in recent weeks after lagging the market for much of the year, what it says The Nasdaq 100 is on track for its longest bull run since 2017 if the index extends gains on Thursday.
