The Dow Jones Industrial Average closed at a record 53,055.91 on July 6, as renewed optimism for artificial intelligence drove a rally in tech and semiconductor stocks.
AI Sector Recovery and the “Magnificent Seven”
Wall Street saw a return of faith in the AI trade after a slump in chip stocks during late June. This rebound was signaled by Hon Hai (Foxconn), an Nvidia supplier, which reported quarterly sales growth that exceeded expectations, Yahoo Finance reported.
The rally included several of the “Magnificent Seven” megacaps, specifically Alphabet, Apple, Meta, and Tesla. Broadcom emerged as a primary driver for the S&P 500, rising 3.7% following the announcement of long-term agreements to provide silicon products to Apple, AP News reported.
However, not all AI-linked news was positive. Microsoft shares fell after the company announced it would no longer have exclusive access to OpenAI’s lineup and that their revenue-sharing agreement is ending, according to Yahoo Finance.
Goldman Sachs’ trading desk noted that momentum stocks had fallen 24% cumulatively from their peak—the largest drawdown since the first quarter of 2023. While the firm suggests a short-term “buy-the-dip” window, it warned that if the market continues to deleverage, the maximum drawdown could reach twice the current decline, TradingKey reported.
SK Hynix and the $28 Billion Nasdaq Listing
The global appetite for AI memory will face a major test this week. South Korean chipmaker SK Hynix plans to raise $28 billion by selling shares on the Nasdaq this Friday, July 10, AP News reported.
This offering would be one of the biggest U.S. offerings ever, trailing SpaceX’s IPO from last month, which raised $75 billion. The listing is intended to reduce a valuation discount for SK Hynix, which currently trades at 6.2 times its estimated earnings for the next 12 months, compared to Micron Technology’s valuation of approximately 7 times, according to TradingKey.
Other notable movements in the sector include:
- TeraWulf: Climbed 4.9% after securing a 20-year deal with Anthropic to use its Kentucky data center, a move expected to generate roughly $19 billion in revenue.
- Intel: Rose over 3.5% in pre-market trading after raising prices for consumer CPUs by $30 to $50 and increasing server product prices by hundreds to thousands of dollars.
- Samsung Electronics: Expected to report a preliminary second-quarter profit that increases 18-fold year-on-year.
Oil Volatility and the Strait of Hormuz
Energy markets remained unstable as investors weighed conflicting signals regarding Iran. According to Yahoo Finance, Axios reported that Iran proposed to lift its blockade of the Strait of Hormuz and end the war, though Tehran would push nuclear negotiations to a later date.
Despite this proposal, Bloomberg oil strategists noted that traffic through the Strait of Hormuz remained near zero on Monday morning. This tension pushed Brent crude futures above $100 a barrel and West Texas Intermediate (WTI) above $96 in some sessions.
However, a separate shift occurred when OPEC+ announced that seven members would expand oil production by 188,000 barrels per day in August. This marks the fifth consecutive month of output increases. Following this announcement, Brent crude fell 0.2% to $71.99, AP News reported.
Trade Policy and the August Tariff Deadline
The market is bracing for the implementation of sweeping new tariffs scheduled for August 1. Commerce Secretary Howard Lutnick reaffirmed this deadline, describing it as a “hard stop,” according to Yahoo Finance. Treasury Secretary Scott Bessent added that the administration is prioritizing the quality of trade deals over simply making them.
The impact of these tariffs is already appearing in corporate earnings. Cleveland-Cliffs reported second-quarter results that beat Wall Street projections, receiving a boost from the tariffs. Conversely, the EU is reportedly increasing the scope of its retaliation if a trade pact with the U.S. is not reached.
Market Summary: July 6
| Index/Asset | Closing Value/Price | Change |
|---|---|---|
| Dow Jones Industrial Average | 53,055.91 | +155.84 (+0.29%) |
| S&P 500 | 7,537.54 | +54.19 (+0.7%) |
| Nasdaq Composite | 26,121.16 | +288.49 (+1.1%) |
| Spot Gold | $4,150/oz | Extended Gains |
| Spot Silver | $62.07/oz | Extended Gains |
| Bitcoin (BTC) | $62,950 | Hovering |
Investors now turn toward the Federal Reserve’s upcoming meeting. The central bank is widely expected to hold rates steady as the Iran conflict complicates the inflationary outlook. This meeting is expected to be the penultimate one chaired by Jerome Powell before leadership transitions to Kevin Warsh, Yahoo Finance reported.
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