Semiconductors Lead Market Rebound as Easing Oil Prices Revive Risk Appetite

Stocks rebounded strongly as investors rotated back into semiconductor names while declining oil prices helped restore confidence across economically sensitive sectors following Wednesday’s geopolitical-driven selloff. The Nasdaq Composite led the advance with a 1.3% gain, the S&P 500 climbed 0.8%, and the Dow Jones Industrial Average added 0.3%, although weakness in several defensive sectors capped its upside.

Technology once again set the pace for the market. The information technology sector advanced 1.8%, supported by a 3.1% rally in the Philadelphia Semiconductor Index. Optimism surrounding the AI investment cycle strengthened after Nikkei reported that Applied Materials CEO Gary Dickerson expects chipmakers to continue expanding capacity for years to come, reinforcing expectations for sustained semiconductor capital spending.

Memory stocks remained at the center of the rally after Reuters reported that SK Hynix’s upcoming U.S. ADR offering was more than seven times oversubscribed, underscoring robust institutional demand for AI-related semiconductor investments. Micron gained 4.5%, Sandisk surged 7.5%, while equipment manufacturers such as Lam Research climbed 6.0%. AI infrastructure leaders also posted impressive gains, with Advanced Micro Devices rising 5.7%, highlighting investors’ continued preference for companies most directly tied to the AI buildout.

Beyond technology, lower energy prices created a more favorable backdrop for cyclical sectors. WTI crude oil futures declined $1.43, or 1.9%, to settle at $72.10 per barrel despite ongoing exchanges of fire between the U.S. and Iran. The retreat in oil prices also helped Treasury yields ease from Wednesday’s elevated levels.

Consumer discretionary stocks gained 1.2%, led by cruise operators such as Norwegian Cruise Line, which benefited from lower fuel costs. Tesla also rebounded sharply, rising 3.2% after Wednesday’s decline.

Industrials added 0.4%, with transportation stocks contributing to the advance. FedEx Freight climbed 7.6%, while airline stocks also benefited from the decline in energy prices.

Financials remained among the market’s strongest groups, advancing 1.0% as investors continued buying into Wednesday’s weakness.

The decline in crude oil prices weighed on energy shares, which fell 1.6%. Defensive sectors also lagged as investors shifted back toward growth-oriented assets. Consumer staples dropped 1.8%, the weakest performance among the S&P 500 sectors, after Costco fell 4.2% on softer June comparable sales growth and PepsiCo declined 3.3% despite delivering a slight earnings beat, as disappointing North American results overshadowed the report. Utilities slipped 0.6%, while health care edged 0.1% lower.

Smaller companies also participated in the rebound. Both the Russell 2000 and the S&P MidCap 400 advanced 1.2%, reflecting improving market sentiment as lower oil prices and easing Treasury yields encouraged broader risk-taking.

Thursday’s session effectively reversed many of Wednesday’s trends. Falling oil prices helped improve participation across cyclical sectors, while semiconductor stocks once again emerged as the market’s primary leadership group. Despite continued geopolitical uncertainty, investors remained focused on the long-term growth outlook for AI infrastructure, reinforcing confidence in one of the market’s strongest secular investment themes.

Our FTinvest 11 model portfolio gained 0.20% to close at 1,031.56, extending its recovery with another positive session. The portfolio remains comfortably above the 1,000 level and has now recovered much of the June correction, trading approximately 4.4% below its all-time high of 1,078.93.

FTinvest 11 is now up approximately +11.13% year-to-date, maintaining a solid double-digit return for 2026. While the pace of the recovery has moderated over the past two sessions, the portfolio continues to build on the momentum established in early July. Its disciplined, value-driven investment strategy remains focused on long-term capital appreciation, with recent performance demonstrating resilience following a period of heightened volatility.