S&P 500 Falls 0.26% as Chip Rebound Fizzles, June 10

The S&P 500 fell 0.26% to 7,386.65 on June 9 as a one-day rebound in technology stocks collapsed. The Nasdaq dropped 0.97% to 25,678.82. Middle East tensions and concerns about a SpaceX IPO later this week drove selling pressure. Meyka rates the S&P 500 a C+ with a 12-month target of $7,250.83, suggesting limited upside from current levels.

Chip Rally Fades After Brief Recovery

Semiconductor stocks surged on Monday after a brutal 10% drop on Friday, but gains evaporated on Tuesday. The iShares Semiconductor ETF fell 1% after rising 6% the day before. Micron Technology dropped 1% following a 10% jump on Monday. The Philadelphia SE Semiconductor Index fell as much as 8.6% intraday before paring losses to end down 1.9%.

Middle East Tensions Reignite Selling

President Trump said Iran shot down a U.S. Apache helicopter patrolling the Strait of Hormuz and vowed to respond. The Cboe Volatility Index hit its highest level since April 7 as stocks sold off. Analysts at JonesTrading noted that Trump’s post “created another leg down” in the market. Investors rotated out of growth stocks into value names like Home Depot that could benefit from reopening the strait.

Dow Outperforms as Rotation Continues

The Dow Jones Industrial Average rose 86.10 points, or 0.17%, to 50,872.11. The Russell 1000 value index gained 0.4%, outperforming the Russell 1000 growth index, which fell 0.7%. Materials and consumer discretionary led the S&P 500 on Tuesday. Oil prices fell 3.4% to $88.20 a barrel as hopes for a Middle East ceasefire briefly lifted.

What’s Ahead for Markets

Consumer price data for May arrives on June 10, which could show how rising energy prices from the Iran war are affecting inflation. SpaceX’s IPO on June 12 is targeting a $1.75 trillion valuation and could draw investor capital away from other growth stocks. Analysts worry about overexuberance in high-growth technology names ahead of the listing.

Final Thoughts

The S&P 500’s brief chip rally collapsed as Middle East tensions and SpaceX IPO concerns drove a rotation into value stocks. Meyka’s C+ grade and $7,250.83 12-month target suggest caution ahead of inflation data and the SpaceX debut.

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