Stocks Climb on Tech Results, Iran Talks Optimism: Markets Wrap
(Bloomberg) — Tech shares rallied on the back of strong results from Intel Corp. and SAP SE, with the Nasdaq 100 on track for a fourth straight weekly gain. Brent erased gains on hopes for talks between the US and Iran.
Intel surged 29% in premarket trading on a blockbuster sales forecast. Taiwan Semiconductor Manufacturing Co. jumped 5% in Taipei after regulators eased limits on single-stock fund holdings. Nasdaq 100 contracts advanced 1.5%, while those for the S&P 500 gained 0.6%.
Brent erased gains to fall 1.2% to below $104 a barrel. A Pakistani official familiar with the matter said Iran’s foreign minister was expected in Islamabad on Friday, with a second round of talks between Tehran and Washington expected. The dollar slid 0.2%. Treasuries advanced, with the 10-year yield down two basis points at 4.31%.
“Those who called the end of the AI trade made a big mistake, as we can see looking at the semiconductor space,” said Mabrouk Chetouane, head of global market strategy at Natixis Investment Managers. “The earnings growth is just astounding. It’s a sweet spot where the offer for chips can’t meet the demand.”
In Europe, SAP climbed 5.5% as its results helped temper fears of disruption from artificial intelligence for software firms. Still, the Stoxx 600 fell 0.1%, with sectors such as autos and retail hit on concern that the war in the Middle East will have a long-lasting impact on consumer sentiment.
Resurgent optimism over the economic potential of artificial intelligence has powered semiconductor manufacturers to an unprecedented 17-day rally. Investors also see the sector as at little risk of spillover from the Iranian war, with corporate profits and outlooks outpacing expectations in most instances.
“One takeaway from this earnings season is that the US leadership is back because of its dominance in tech, and semiconductors notably,” said David Kruk, head of trading at La Financiere de l’Echiquier in Paris. “Investors are now focusing more on earnings than geopolitics and taking the view that eventually a peace deal will occur.”
Traders will watch signals from the US and Iran, along with shipping flows, for clues on energy supply risks, with any Strait of Hormuz escalation likely to keep oil elevated.
What Bloomberg Strategists Say:
“Equities are proving more resilient to rising oil, allowing tech to power gains. There is still a clear reaction function between energy prices and equities, but the beta has declined, even as oil has risen above levels seen since the ceasefire was announced.”
— Skylar Montgomery Koning, macro strategist. For the full analysis, click here.
Corporate Highlights:
Meta Platforms Inc. and Microsoft Corp. are planning cuts or announcing buyouts that could affect as many as 23,000 jobs, part of an effort to streamline operations and offset heavy spending on artificial intelligence. DeepSeek rolled out preview versions of a new flagship artificial intelligence model a year after upending Silicon Valley. Intel Corp. delivered a blockbuster sales forecast that shattered Wall Street expectations, signaling that the long-struggling chipmaker is benefiting from the giant build-out of artificial intelligence computing. Banca Monte dei Paschi di Siena SpA said it has no plans to sell its holding in Assicurazioni Generali SpA, pushing back against a news report. Porsche AG has agreed to sell its stake in the venture that owns the Bugatti supercar brand to a consortium led by HOF Capital, the fund co-founded by a scion of Egypt’s billionaire Sawiris family. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.5% as of 7:35 a.m. New York time Nasdaq 100 futures rose 1.5% Futures on the Dow Jones Industrial Average rose 0.1% The Stoxx Europe 600 was little changed The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.3% to $1.1714 The British pound rose 0.2% to $1.3497 The Japanese yen rose 0.2% to 159.39 per dollar Cryptocurrencies
Bitcoin rose 0.6% to $78,367.98 Ether rose 0.2% to $2,331.62 Bonds
The yield on 10-year Treasuries declined two basis points to 4.30% Germany’s 10-year yield was little changed at 3.00% Britain’s 10-year yield was little changed at 4.94% Commodities
West Texas Intermediate crude fell 1.7% to $94.26 a barrel Spot gold rose 0.3% to $4,709.99 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Neil Campling, Winnie Hsu and Subrat Patnaik.
(A previous version of the story corrected the length of the Nasdaq 100’s weekly advance.)
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