U.S. stocks extend weekly gains as ceasefire deal and chip rally offset Fed pressure

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U.S. stocks extend weekly gains

Highlights

The S&P 500 rises 0.9% and the Nasdaq adds 2.4% for the four-session week, rebounding after initial declines following Fed hawkish signals.
A U.S.-Iran ceasefire extension and reopening of the Strait of Hormuz send U.S. crude down nearly 10% for the week, lowering gasoline below $4 a gallon and easing inflation fears.
Semiconductor stocks surge, with Intel up 7.6%, Broadcom up 7.7%, Arm up 15.4%, and SOXX ETF up 7.3% for the week, boosted by Apple’s chip partnership announcement.

Fed signals and market rebound

As reported by CNBC, investors initially pull back after Federal Reserve policymakers signal a possible interest rate hike to address persistent inflation while keeping rates unchanged at the end of their two-day June meeting.

The selloff deepens during new Chairman Kevin Warsh's post-meeting news conference on Wednesday, when he says officials remain committed to bringing inflation down to the Fed's 2% target. He also scales back the closely watched policy statement and announces task forces aimed at reshaping the central bank, adding to market unease.

Stocks recover a day later. The S&P 500 rises 1.1% on Thursday after falling 1.2% in the previous session, while the Nasdaq gains 1.9% after a 1.3% decline. For the four-session week, the S&P 500 advances 0.9% for its 11th winning week in the past 12, and the Nasdaq adds 2.4%.

Ceasefire progress and chipmakers lift sentiment

Broader risk appetite improves as developments in the U.S.-Iran conflict reduce pressure on energy markets. The two countries sign a memorandum of understanding to extend their ceasefire and reopen the Strait of Hormuz, sending U.S. crude down nearly 10% for the week and pushing the national average price of unleaded gasoline below $4 a gallon.

Markets also respond to expectations that the agreement gives Washington and Tehran 60 days to reach a final peace deal, even though follow-up talks expected on Friday do not take place. Lower oil prices support equities by easing concerns over energy-driven inflation and consumer costs.

Semiconductor shares add further momentum. Intel jumps 10.6% on Thursday and reaches records after President Donald Trump says Apple will work with the company to develop and design chips in the United States, leaving Intel up 7.6% for the week. Nvidia rises 2.7% for the week, Broadcom gains 7.7%, Arm climbs 15.4%, and the iShares Semiconductor ETF, SOXX, advances nearly 7.3% over the period.

In our earlier coverage of Kevin Warsh’s first days as Federal Reserve chair, we outlined the leadership constraints he faces as he tries to reinforce the Fed’s inflation-fighting credibility while navigating internal dynamics and a politically sensitive backdrop. We noted that his push to reshape the institution—and the market’s focus on the Fed’s independence—could influence how confidently policymakers pursue the 2% inflation goal and signal the future path of interest rates.

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