US stocks opened higher on Monday as semiconductor shares rebounded from last week’s steep selloff, while investors also found some relief in signs that tensions in the Middle East may be easing.
The Dow Jones Industrial Average index opened 252 points higher. The S&P 500 rose about 0.94% while the Nasdaq Composite gained roughly 1.34%.
The recovery followed a difficult end to last week, when the technology-heavy Nasdaq Composite plunged 4.2%, its largest one-day decline since April 2025, amid a broad retreat in artificial intelligence-related stocks.
Chip stocks recover after sharp selloff
Semiconductor companies led Monday’s rebound after a sector-wide rout erased roughly $1 trillion in market value for US-listed chipmakers on Friday.
Shares of Nvidia and Broadcom rose between 1.5% and 2.8% in trading, while Micron gained more than 8% after falling 13% during the previous session.
The iShares Semiconductor ETF also recovered, rising about 4% after suffering its worst daily decline in more than six years on Friday.
Last week’s weakness was triggered by a combination of factors. Broadcom’s latest earnings report failed to raise its AI semiconductor outlook, disappointing investors who had anticipated stronger growth guidance.
At the same time, stronger-than-expected US employment data raised concerns that the Federal Reserve could maintain tighter monetary policy for longer.
The selloff also spilled into overseas markets. South Korea’s Kospi index dropped more than 8% on Monday, while Japan’s Nikkei 225 fell 3.85% as investors reacted to Friday’s decline on Wall Street.
Middle East developments improve sentiment
Market sentiment was also supported by signs that hostilities between Iran and Israel could be easing.
Iran’s military announced that its first wave of attacks on Israel since an April ceasefire had concluded.
Separately, reports indicated that Israel had halted strikes on Iran at the request of US President Donald Trump.
However, uncertainty remained after Iran launched strikes on Sunday and warned that military operations could resume if Israel continued attacks in Lebanon.
Oil prices, which had surged more than 5% earlier in the session amid geopolitical concerns, pared gains as developments unfolded.
West Texas Intermediate crude was last trading up by a little more than 1%, near $91 per barrel.
Investors await inflation data and major IPO
Attention is now shifting toward upcoming US inflation data, which could provide fresh clues about the Federal Reserve’s policy path.
Friday’s stronger-than-expected jobs report showed that nonfarm payrolls increased by 172,000 in May, significantly above expectations.
According to CME Group’s FedWatch tool, markets are now pricing in a 42% probability of a 25-basis-point interest rate increase in December.
Investors are also preparing for the expected public debut of SpaceX later this week, an offering that many market participants view as another major test of enthusiasm surrounding artificial intelligence-related investments.
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