On June 19, the main thread in US equities shifted back from geopolitical risk to AI chips. A temporary US-Iran agreement was formally signed in Geneva, and three Saudi supertankers crossed the Strait of Hormuz on the same day. The reopening of the waterway reduced the geopolitical premium that had supported oil prices and outweighed the short-term pressure from the FOMC hawkish dot plot. The S&P 500, Nasdaq and Russell 2000 all closed higher, while the Dow posted its third record close of the week. The Philadelphia Semiconductor Index gained more than 6% in a single session and reached another all-time high. Energy stocks, by contrast, fell with crude prices and became the only losing sector among the S&P 500's 11 groups.
Indexes Repaired Most of the FOMC Shock
The S&P 500 rose 1.08% to 7,500.58, the Nasdaq advanced 1.91% to 26,517.93, the Dow added 0.14% to 51,564.70, and the Russell 2000 led with a 2.12% gain to 2,979.77. The size of the gains declined from small caps to large caps, while the Dow was nearly flat. That pattern showed that the rebound was mainly driven by the high-beta shares that had suffered the sharpest losses over the previous two sessions, while defensive and blue-chip stocks did not keep pace. The US-Iran news had been largely priced before the open, and the major indexes moved steadily upward through the session. By the close, they had recovered most of the losses caused by the prior day's FOMC shock.
Volatility and macro assets also reflected the change in tone. The VIX dropped 11.06% to 16.40, indicating that the fear triggered by the FOMC statement faded sharply within one day. The 10-year Treasury yield slipped slightly to around 4.445%, while the 2-year yield remained above 4.18%. The market did not remove its pricing for a September rate increase; rather, the improvement in risk appetite temporarily suppressed volatility. Gold fell to $4,210 per ounce, silver moved lower as well, and the US dollar index edged down while staying at elevated levels.
Intel, Apple and the Broader Semiconductor Chain
The main technology catalyst centered on Intel. Trump posted on Truth Social early in the day that Apple and Intel had reached a design and foundry cooperation arrangement. Under the arrangement described in the post, Intel would initially take on mature-process chips for iPads and older iPhone models, while flagship products would still be supplied by TSMC. The talks had been under way for more than a year. For Intel's foundry business, the arrangement would bring in a major external customer; for Apple, it would diversify dependence on TSMC. Neither company had issued a formal response, and the market was pricing the directional significance of the deal rather than official confirmation from the companies.
In the same post, Trump also said Nvidia had agreed to produce its first chips at Intel and that Musk had promised to jointly build TerraFab, described in the source as the largest wafer fab in history. The Apple cooperation became the third piece of Intel's foundry map. Intel closed up about 10.5% at $133.82. Apple was also reported to be preparing price increases because of higher memory and storage chip costs, helping SanDisk gain more than 11% and Micron rise nearly 9%. The entire memory supply chain benefited. Nvidia added nearly 3%, and the Philadelphia Semiconductor Index rose more than 6% to a record high. Equipment, memory and computing-power names all moved higher, showing that the long-term AI capital expenditure theme continued to attract buying after the hawkish dot plot had been digested.
SpaceX moved in the opposite direction. The stock fell 3.56% to $185.00, marking a second consecutive down day, with a two-day cumulative decline of about 8.3%. Bloomberg reported that the company was preparing to issue at least $20 billion of investment-grade dollar bonds to repay a bridge loan due in 2027. Concerns over potential equity dilution, combined with the FOMC's hawkish impact, created a double pressure on the stock. Even after the two-session pullback, SpaceX remained up nearly 15% for the week and stood 37% above its IPO-day issue price, but the short-term pressure had not disappeared.
Energy Led the Decline as WTI Hit a Three-Month Low
Energy was the weakest area of the session. WTI crude fell about 2% in one day to $74.29 per barrel, its lowest level in nearly three months. Exxon Mobil and Chevron both declined, and the Dow Transportation Average fell more than 4%. With the Strait of Hormuz reopened, the geopolitical premium was released quickly. Earlier year-to-date gains of 20% to 40% began to loosen, turning energy from the week's biggest winner into the day's biggest loser. Technology, consumer discretionary and industrials led the market, as capital moved out of defensive and energy shares and back into the computing-power chain. Funds that had left technology shares after the FOMC shock returned in part after the geopolitical pressure eased.
Crypto assets showed only a limited response to the geopolitical improvement. According to CoinGecko figures cited in the source, Bitcoin closed around $64,026 and Ethereum around $1,734. The pressure from hawkish rate expectations had not been removed from the crypto market. The source highlighted upcoming PCE data, Flash PMI and Micron's earnings as the next scheduled events. Micron's guidance was described as the most direct indicator for AI computing demand, after a below-expectation guidance figure in the previous quarter had dragged the entire semiconductor sector sharply lower in a single session. Russell Reconstitution will take effect at next Friday's close, with mechanical rebalancing funds expected in the source to produce a large increase in turnover and a rise in small-cap volatility.
Chaoxiang Research summarized Thursday's rebound as having two drivers: the US-Iran signing released the geopolitical premium, and chip stocks confirmed through actual gains that the AI theme was still intact. The source treated the geopolitical premium as a one-time factor that was largely realized once the agreement was signed. It also stated that if Iran later reverses course, the market reaction would be faster and stronger than the first time. The chip-stock logic was described as more durable, because the joint rise in Intel, SanDisk and Micron showed breadth across the industrial chain and fundamental support for AI capital expenditure pricing. For SpaceX, the new variable behind the two-day decline was the planned $20 billion bond issue; once implemented, financing pressure and dilution expectations would become a continuing drag on the stock price rather than only a valuation adjustment. The next PCE release was framed as the nearest test: if the data again comes in above expectations, a September rate hike would move from probability to consensus; if the data weakens, the market's repricing of rate-cut expectations would accelerate.