From Hormuz Shock to Semiconductor Euphoria: S&P 500 Hits Record 7,164 as Intel Rockets 24% and Iran Peace Hopes Crush Oil

It was a week that began with geopolitical shock and ended with semiconductor euphoria. The S&P 500 navigated a volatile five-session stretch to close Friday at a fresh all-time high of 7,164.29, gaining +0.55% for the week. The Nasdaq Composite outpaced with a +1.51% advance to 24,836.60, powered by one of the most explosive chip rallies since the dot-com era. The Dow, weighed down by industrial and healthcare weakness, lagged with a −0.44% decline to 49,230.70.

The defining narrative arc unfolded across three acts. Iran’s re-closure of the Strait of Hormuz over the weekend sent Brent crude surging from $87.65 to a week-high of $106.32 by Thursday — only for peace diplomacy to send it crashing nearly 6% on Friday to $100.09. Meanwhile, Intel’s blockbuster earnings catapulted the stock 24% in a single session, extending the PHLX Semiconductor Index’s winning streak to a remarkable 19 consecutive days — the longest since January 2000. And Apple CEO Tim Cook’s surprise retirement announcement Tuesday added a corporate shock that markets ultimately absorbed with composure.

The 10-year Treasury yield climbed 8 basis points to 4.34%, reflecting both inflation anxiety from surging oil and resilient economic data, while the VIX settled at 18.71 — elevated but well below panic levels. For bulls, the takeaway is clear: the AI-driven semiconductor boom remains powerful enough to overpower geopolitical headwinds and push equities to new highs.

Weekly Scoreboard

The Week’s Narrative

The week opened under a cloud of geopolitical anxiety. Iran’s Revolutionary Guard re-closed the Strait of Hormuz over the weekend and attacked commercial vessels transiting the waterway, prompting the U.S. Navy to seize the Iranian cargo ship Touska. Brent crude gapped to $92.08 on Monday and kept climbing — by Thursday it had breached $106, a level not seen since the initial Hormuz crisis in March. The energy complex dragged the S&P 500 down to its weekly low of 7,062.57 on Tuesday, a pullback of nearly 1% from the prior week’s close.

What transformed the mood was the resurgent AI trade. Wednesday’s session was the pivot point: JPMorgan’s equity strategy desk published a bullish note on AI infrastructure spend, Anthropic unveiled its next-generation Mythos model with a $25 billion Amazon investment backing, and buyers flooded into beaten-down chip names. AMD surged 6.7%, Broadcom rallied 5.1%, and Boeing jumped 5.5% on pre-earnings optimism. The S&P 500 reclaimed 7,137 in a broad +1.03% advance — the strongest single-session gain in nearly three weeks.

Thursday brought a reality check as tech AI layoffs cascaded across Silicon Valley — Microsoft offered voluntary buyouts to 7% of its U.S. workforce, Meta confirmed 8,000 additional job cuts, and ServiceNow crashed 17.7% on a revenue miss. But the damage was contained: Texas Instruments soared 19.4% on a blowout quarter driven by data-center analog chip demand, and Intel’s after-hours earnings beat set up Friday’s fireworks.

Friday was the week’s crescendo. Intel rocketed 23.6% — its largest single-day gain since the dot-com era — after reporting Q1 revenue of $13.6 billion (well above the $12.9 billion consensus) and announcing its Terafab foundry expansion. AMD added another 13.9%, and the PHLX Semiconductor Index extended its winning streak to 19 consecutive sessions, the longest since January 2000. Simultaneously, Iran peace talks in Muscat gained traction, sending Brent plunging 5.9% from its $106 peak to $100.09. The S&P 500 surged to a new all-time high of 7,164.29.

Beyond the headline drama, Apple’s corporate succession story played out with remarkable calm. Tim Cook’s Tuesday announcement that he would step down in favor of hardware chief John Ternus (effective September 1) initially spooked shares, but AAPL recovered by Wednesday and ended the week at $271.06 — down just 0.8% — suggesting the market views the transition as orderly rather than destabilizing.

Sector Scorecard

Technology dominated the week, propelled by the semiconductor supercycle narrative. Energy delivered strong absolute returns early in the week but gave back gains as oil reversed Friday. Defensives like Utilities and Consumer Staples outperformed mid-week when growth fears spiked, while Communication Services and Healthcare lagged.

Movers of the Week

Top Winners

Top Losers

Economic Data Roundup

It was a relatively light week for economic releases, but the data that did arrive reinforced the narrative of a resilient U.S. economy.

Thursday’s initial jobless claims of 214,000 came in well below the 222,000 consensus, signaling continued labor market strength despite the cascading AI-related layoffs from Microsoft, Meta, and others. The CAPE tariff refund system launch on Tuesday — unlocking $166–175 billion in eligible refunds — represents a meaningful fiscal tailwind that could boost corporate margins in coming quarters.

Fed Watch & Rates

The fixed-income complex reflected the week’s cross-currents. The 10-year Treasury yield climbed 8 basis points from 4.26% to 4.34%, driven by rising oil prices feeding inflation expectations and robust economic data undermining the case for near-term easing. The 2-year yield rose even more — up 12 basis points to 3.83% — compressing the 2s/10s spread by 2 basis points to +53 bps, though the curve remains positively sloped.

Kevin Warsh’s confirmation hearing on Tuesday was the week’s major Fed event. The incoming Fed Chair struck a hawkish-pragmatic tone, emphasizing “data dependence” while acknowledging the inflationary impact of sustained oil price elevation. CME FedWatch probabilities for a June 25 basis point rate cut drifted lower during the week, from roughly 68% to approximately 62%, as oil headwinds complicated the disinflationary path.

The ICE BofA High Yield OAS widened modestly from 2.83% to 2.86%, suggesting credit markets remain sanguine despite the equity volatility. Financial conditions overall remain accommodative, though the oil-driven inflation tail risk is the primary obstacle to dovish policy.

Geopolitical & Macro Developments

Iran and the Strait of Hormuz

The week’s dominant geopolitical story was the Hormuz whipsaw. Iran’s Revolutionary Guard re-closed the strait over the weekend, attacking commercial vessels and prompting a U.S. Navy response that included seizing the Iranian cargo ship Touska. Brent crude surged from $87.65 to a peak of $106.32 by Thursday — a 21% spike in four trading sessions. The Friday reversal came as diplomatic talks in Muscat gained genuine traction, with multiple reports of a framework for reopening the waterway. President Trump also extended the Israel-Lebanon ceasefire by three weeks, reducing broader Middle East tension.

Apple CEO Succession

Tim Cook’s Tuesday announcement that he would retire as Apple CEO, with hardware chief John Ternus taking over September 1, was the most significant corporate leadership change since Bob Iger’s return to Disney. AAPL dipped 2.5% on Tuesday but recovered by mid-week, ending at $271.06. The market’s composure suggests confidence in Ternus’s product vision and Cook’s orderly transition.

AI Workforce Restructuring

The week saw an unprecedented wave of AI-driven workforce changes across Big Tech. Microsoft offered its first-ever voluntary buyouts to 7% of its U.S. workforce, Meta confirmed 8,000 additional layoffs, and ServiceNow’s 17.7% crash highlighted investor punishment for companies that can’t demonstrate AI revenue traction. The message is clear: AI is simultaneously creating enormous value for hardware makers and forcing painful restructuring in software and services.

CAPE Tariff Refunds

The Tuesday launch of the CAPE tariff refund system — making $166–175 billion in refunds eligible — represents a significant and underappreciated tailwind for U.S. corporate margins. Companies that overpaid tariffs during the trade war years now have a systematic path to recouping those costs, which should flow through to earnings in Q2 and Q3.

Week Ahead Preview

Next week brings a critical batch of catalysts that will test whether the semiconductor-led rally has legs:

• Mega-cap earnings continue: Alphabet (GOOGL) and Microsoft (MSFT) report Tuesday after the bell. Amazon (AMZN) reports Thursday. These three names represent the heart of the AI infrastructure investment cycle — any disappointment on cloud/AI capex guidance could reverse the week’s momentum.
• GDP (Q1 advance estimate): Wednesday’s first read on Q1 GDP will gauge whether the economy maintained its momentum through the tariff uncertainty and oil spike of early 2026.
• Core PCE (March): Thursday’s release of the Fed’s preferred inflation measure will be pivotal for rate expectations. A hot print above 0.3% MoM could push June cut odds below 50%.
• Employment Cost Index (Q1): Friday’s ECI measures wage inflation — the Fed’s key metric for services-side price pressure.
• Iran diplomacy: Muscat talks continue. Any breakdown would send oil back toward $106; further progress could push Brent below $95.

The AlphaEdge Take

This was the week that proved the semiconductor supercycle is the most powerful force in this market. When Intel — a stock that spent years as a punch line for missing the AI wave — can rally 24% in a single session and push the PHLX SOX Index to 19 consecutive up days, you’re witnessing something structurally significant. The AI hardware buildout is moving from training infrastructure to inference infrastructure, and companies with manufacturing capacity (Intel’s Terafab, TXN’s analog fabs) are being re-rated accordingly. This is not a momentum trade — it’s a capex cycle with years of runway.

The oil whipsaw is the wild card that could derail everything. Brent’s round trip from $87 to $106 and back to $100 in five days encapsulates the fragility of the geopolitical equilibrium. If Iran peace talks in Muscat produce a durable framework, Brent could retreat to the $85–90 range and unlock another leg lower in yields — which would be unambiguously bullish for equities. If talks collapse, $106+ oil returns and the Fed’s June cut probability drops below 50%. We assign roughly 60% probability to the constructive scenario, but position sizing should reflect the binary nature of this outcome.

The S&P 500 at 7,164 sits just 0.5% above its 50-day moving average, with an RSI in the mid-60s — bullish but not yet overbought. The key technical level to watch is 7,100, which served as both support and resistance multiple times this week. A sustained hold above 7,150 would confirm the breakout; a failure below 7,100 on heavy volume would signal the rally needs to consolidate.

For the week ahead, the mega-cap earnings trio of Alphabet, Microsoft, and Amazon will be the ultimate test. These companies are spending tens of billions on AI infrastructure — the market needs to see that revenue is following the capex. Core PCE on Thursday will determine whether the Fed can still plausibly cut in June. Our base case: the S&P 500 trades in a 7,080–7,250 range next week, with the bias higher if earnings deliver and PCE cooperates. The semiconductor rally has earned the right to be trusted — until the data says otherwise.