The technology and semiconductor complex delivered exceptional performance, with Intel surging on reports of potential partnerships with Apple and Samsung for US-based chip manufacturing. This development reinforces the strategic narrative of supply chain reshoring and government-backed semiconductor independence. Broad-based strength emerged across the chip space, with Micron Technology and Advanced Micro Devices posting significant gains. AMD further enhanced sentiment after market close, reporting better-than-expected earnings with robust forward guidance driven by surging data center demand. Super Micro Computer initially traded flat but gained in extended sessions on improving margin expectations.

WTI crude futures declined sharply as geopolitical tensions in the Strait of Hormuz showed signs of de-escalation. Diplomatic signals between the US and Iran, combined with US efforts to secure shipping routes, reduced immediate supply concerns. The oil price decline contributed to lower inflation expectations, providing a supportive backdrop for equities, particularly interest rate-sensitive growth sectors. Airlines benefited significantly from lower fuel cost outlooks, while cyclical sectors including materials outperformed due to reduced input cost pressures. However, the Strait remains strategically vulnerable, with substantial global energy flows still exposed to potential disruption.

The earnings landscape revealed selective market conditions despite an overall strong beat rate across the S&P 500. High-growth names faced elevated expectations, with Palantir Technologies declining sharply after results disappointed, while PayPal encountered pressure from cautious management commentary. Conversely, smaller-cap names Sterling Infrastructure and DigitalOcean posted outsized gains on company-specific catalysts. Economic data presented a mixed but stable picture: new home sales exceeded expectations, job openings declined slightly but remained above forecasts, and ISM services data showed marginal weakness. These indicators collectively support a soft landing narrative without suggesting overheating or sharp deceleration.

We assign a 70% probability to continued near-term upside momentum, supported by three key pillars: easing geopolitical risks in energy markets, robust earnings momentum in technology and AI-related sectors, and stable macroeconomic conditions. However, concentrated market leadership and unresolved geopolitical tensions present downside risks. Key catalysts include energy market stability, broader sector participation expansion, and sustained earnings growth beyond technology. US Treasury yields remain anchored with low probability of near-term Fed rate cuts, while global markets maintain risk-on sentiment despite limited Asian participation due to regional holidays.