SK Hynix, Micron Lead Chip Rally as Nasdaq Gains 1.3% Despite Middle East Tensions

Micron investment plan, hopes for Nvidia sales to China lift sentiment

Strong demand for SK Hynix ADR helps fuel semiconductor rally

U.S. stocks closed higher on July 9, lifted by a surge in semiconductor shares and a drop in oil prices. Despite renewed tensions in the Middle East, investors viewed the conflict as limited enough for the economy to absorb.

The Dow Jones Industrial Average rose 0.27% to 52,487.41. The S&P 500 gained 0.81% to 7,543.64, while the Nasdaq Composite climbed 1.30% to 26,206.89.

Semiconductor stocks led the advance. Micron Technology said it would invest more than $250 billion in U.S. plants and other facilities by 2035 to meet rising artificial intelligence demand. Sentiment also improved after a report that orders for SK Hynix's American depositary receipts topped seven times the number of shares on offer.

Investor appetite was also supported by a report that Chinese authorities are considering allowing domestic AI companies, including Alibaba and DeepSeek, to buy Nvidia's H200 AI chips on a limited basis. Expectations that U.S. restrictions on semiconductor exports to China could be partially eased helped drive buying across the broader AI chip sector, including Nvidia.

Micron rose 4.54%, while AMD gained 5.67% and ASML added 2.01%. Intel advanced 2.09%, Applied Materials climbed 3.18%, and Broadcom rose 3.20%. Lam Research jumped 6.01%, Arm Holdings surged 9.20%, SanDisk gained 7.59%, and Marvell Technology rose 4.99%.

The U.S. carried out airstrikes on Iran for a second straight day through July 8, reigniting tensions between the two countries. Even so, oil prices fell after President Donald Trump said on July 8 that Iran had called and wanted a deal.

Qatar and Pakistan are also working to bring both sides to the negotiating table, CNBC reported. Brent crude for September settlement fell 2.20% to $76.30 a barrel, while West Texas Intermediate for August delivery dropped 1.96% to $72.08.

Meghan Horneman, chief investment officer at Verdence, said the military conflict between the U.S. and Iran could significantly stoke inflation and that uncertainty remained extremely high. "This could end tomorrow, or it could turn into something bigger. We don't know," she said. In that kind of environment, she added, it is important to maintain sufficient diversification in a global equity portfolio.

Minutes of the Federal Reserve's June meeting released a day earlier showed mounting inflation concerns. At the same time, China's June producer price index posted its fastest increase in four years, adding to worries over weakening oil demand.

Kang Kyung-ju, Hankyung.com reporter qurasoha@hankyung.com