Chips Come Roaring Back. SK Hynix's Record IPO Steals the Show.

AI Chips Power a Broad Rally as Wall Street Shrugs Off Iran Jitters

SK Hynix's Record-Setting IPO Ignites a Semiconductor Rally

• Semiconductor and optical-communication stocks led the market Thursday as SK Hynix's upcoming Nasdaq debut — the South Korean chipmaker lists Friday under ticker SKHY — drew demand more than 7x the available shares, an estimated $24.5 billion raise that would rank as the second-largest foreign-company offering on record.
• Chip-equipment makers were the biggest beneficiaries: Lam Research (LRCX) surged ▲ 10%, while Applied Materials (AMAT) and KLA Corp (KLAC) each jumped ▲ 9%. Optical-networking names Lumentum (LITE), up ▲ 12.10%, and Corning (GLW), up ▲ 7.35%, also ranked among the market's top performers. SK Hynix supplies memory chips to Nvidia, Google, and Microsoft — its listing is being closely watched as a gauge of investor appetite for the next wave of AI-linked infrastructure names.
• The rally helped the Nasdaq Composite outpace its peers, closing at 26,206.89, up ▲ 1.3% on the day, while the S&P 500 added ▲ 0.8% to close at 7,543.64.
• The chip strength was enough to overcome renewed uncertainty around the U.S.-Iran ceasefire, which markets treated as a secondary concern for a second straight session.

Chips Surge, Software Slides for a Second Straight Session

• Semiconductors dominated the tape: beyond the equipment makers, Marvell Technology, Micron Technology, Western Digital, and ARM Holdings each gained roughly ▲ 7%, while SanDisk added ▲ 7.6% — a broad-based move across the memory and AI-chip supply chain.
• Software names lagged for a second consecutive session. Palantir Technologies (PLTR) fell ▼ 4.04% and Salesforce (CRM) slid ▼ 2.4% amid continuing concerns about AI's impact on enterprise software spending.
• Consumer staples came under pressure after PepsiCo (PEP) fell ▼ 3.7% on an earnings miss — adjusted EPS of $2.20 came in below the $2.23 consensus, with the company citing weaker U.S. consumer spending tied to higher gas prices.
• Trucking stocks advanced after Citigroup upgraded the sector — a rare bright spot outside of technology on an otherwise chip-dominated session.

Where the Money Actually Went

• Lumentum (LITE) was the day's standout, surging ▲ 12.10% as optical-networking names rode the same AI-infrastructure wave lifting chipmakers.
• Lam Research (LRCX) jumped ▲ 10%, with Applied Materials (AMAT) and KLA Corp (KLAC) each adding ▲ 9% — semiconductor equipment makers were the session's clearest winners.
• Corning (GLW) rose ▲ 7.35% and Coherent (COHR) added ▲ 5.11%, extending the optical and photonics rally that has tracked AI data-center buildout demand all year.
• Russell 2000 small caps outperformed the large-cap indexes on a daily basis, up ▲ 1.2%, as risk appetite broadened beyond megacap tech into smaller, more cyclical names.

Jobless Claims Surprise Lower as Oil Eases and Volatility Fades

• Initial jobless claims fell 2,000 to 215,000 for the week, a stronger-than-expected labor market signal that helped offset lingering concerns about a slower June payrolls report released last week.
• Oil prices eased Thursday as the paused U.S.-Iran ceasefire held, a day after President Trump raised doubts about the truce — volatility around the conflict has repeatedly moved crude prices over the past week.
• The VIX volatility index dropped ▼ 5.21% to 16.02, its lowest close in weeks, suggesting investors grew more comfortable with the geopolitical backdrop even as the situation remains unresolved.
• Wall Street strategists flagged "bubbly" valuation concerns following the chip-led rally, noting that a meaningful share of S&P 500 constituents remain near 52-week lows even as headline indexes climb.

What to Watch Friday

• SK Hynix (SKHY) begins trading on Nasdaq Friday in what's expected to be the largest ADR offering in market history — an estimated $24.5 billion raise that was more than 7x oversubscribed.
• Taiwan Semiconductor Manufacturing (TSMC) reports June sales Friday; May sales rose 30% year-over-year, and investors will be watching for continued strength ahead of the company's Q2 earnings report.
• Delta Air Lines reports second-quarter results before Friday's open, with analysts focused on whether premium-travel growth can offset rising fuel costs and capacity cuts.
• A bipartisan housing affordability bill is set to become law at midnight Friday into Saturday unless President Trump vetoes it — Congress has already passed the legislation.
• The status of the U.S.-Iran ceasefire remains a wildcard for oil prices and market volatility heading into the weekend.