Semiconductor Rebound Offsets Oil Shock as Geopolitical Tensions Shake Markets

Stocks finished mixed as renewed hostilities between the U.S. and Iran sent oil prices sharply higher, weighing on much of the market. However, a late-session rebound in semiconductor stocks helped limit the damage, allowing the Nasdaq Composite to edge 0.2% higher. The S&P 500 slipped 0.3%, while the Dow Jones Industrial Average fell 1.1% as cyclical sectors bore the brunt of the selling pressure.

Markets opened under pressure after the U.S. launched strikes against Iranian targets in response to attacks on commercial shipping in the Strait of Hormuz. President Trump subsequently declared the ceasefire effectively over and warned that additional military action remained possible. WTI crude oil futures settled up $3.05, or 4.3%, at $73.53 per barrel after climbing more than 6% earlier in the session.

The surge in energy prices weighed heavily on sectors most sensitive to higher input costs and interest rates. Materials fell 2.5%, the steepest decline among the S&P 500 sectors, as packaging companies such as Smurfit Westrock retreated on concerns that rising energy costs could pressure profit margins. Sherwin-Williams also posted notable losses, contributing to the Dow’s underperformance.

Consumer discretionary stocks dropped 1.6%, with travel-related companies, freight carriers, and homebuilders pressured by rising oil prices and higher Treasury yields. The iShares U.S. Home Construction ETF declined 4.0%.

Financials lost 1.9%, communication services fell 1.4%, and rate-sensitive real estate dropped 1.6%, while consumer staples proved comparatively resilient with a modest 0.3% decline.

As expected, the energy sector led the market with a 1.5% gain, although it surrendered part of its earlier advance after President Trump expressed confidence that tensions with Iran would be resolved quickly and reiterated that he does not expect the conflict to escalate further.

Technology provided the market’s primary source of support. The information technology sector rose 1.4% as semiconductor stocks staged an impressive afternoon recovery. The Philadelphia Semiconductor Index climbed 2.2%, helping the market-cap-weighted S&P 500 significantly outperform the equal-weighted S&P 500, which fell 1.2%.

NVIDIA gained 3.6% following reports that China may permit limited purchases of its H200 AI chips for select domestic AI companies. Broadcom advanced 4.8% after Apple expanded its long-term U.S. supply agreement covering wireless connectivity components and custom silicon. Akamai Technologies was the best-performing S&P 500 stock, soaring 10.7% after being selected as a strategic security partner for World Wide Technology’s AI infrastructure initiative, highlighting its growing role in enterprise AI security.

Investors also reviewed the June FOMC meeting minutes, which reaffirmed the Federal Reserve’s data-dependent approach while acknowledging persistent inflation pressures and heightened uncertainty stemming from geopolitical risks. Policymakers emphasized that future interest rate decisions will remain driven by incoming economic data, while market expectations have continued to shift toward fewer rate cuts over the next year.

Despite the sharp rise in oil prices, the market’s underlying leadership remained largely intact. Investors once again stepped in to buy weakness across semiconductor stocks, while favorable developments involving NVIDIA and Broadcom helped cushion the broader market. Although geopolitical tensions remain elevated, the continued resilience of AI-related technology suggests investors remain willing to look through near-term macro uncertainty in favor of long-term growth opportunities.

Our FTinvest 11 model portfolio edged down 0.01% to close at 1,029.47, posting a virtually unchanged session after its recent recovery. The portfolio continues to trade comfortably above the 1,000 level and remains approximately 4.6% below its all-time high of 1,078.93, reflecting the substantial ground regained since the late-June correction.

FTinvest 11 is now up approximately +10.91% year-to-date, returning to solid double-digit gains in 2026. Today’s flat performance suggests a period of consolidation following the recent advance, as the portfolio digests its recovery while remaining well positioned for further progress. FTInvest 11 continues to follow its disciplined, value-driven investment strategy, emphasizing long-term fundamentals over short-term market fluctuations.