AI stocks bounce back as oil retreats after Israel-Iran strikes

US stocks rallied Monday, powered by a sharp recovery in AI semiconductor shares, while oil prices retreated after Iran announced a halt to military strikes on Israel.

The rebound came one session after what The Korea Times described as Wall Street's steepest single-day loss since October, highlighting how quickly sentiment can shift in a sector where the semiconductor index has surged nearly 85% year-to-date.

The S&P 500 gained 0.7% by midday Monday in New York, clawing back ground after Friday's 2.6% decline — the sharpest single-day drop since October — according to The Korea Times. The Nasdaq composite rose 1.4%, while the Dow Jones Industrial Average edged up 0.1%.

Semiconductor shares led the advance. Micron Technology climbed 11.1% Monday after shedding 13.3% the previous session. Marvell Technology surged 15.1% after S&P Dow Jones Indices announced the chipmaker's addition to the S&P 500 index. The broader semiconductor index has risen nearly 85% year-to-date through Thursday.

Nvidia CEO Jensen Huang, speaking at a conference in Taiwan, suggested Marvell could be "the next trillion-dollar company," lending additional momentum to the chipmaker's stock. Separately, Amazon announced a multibillion-dollar deal with Corning for data center infrastructure, The Korea Times reported.

Oil markets swung sharply on geopolitical tensions. Brent crude briefly topped $98 per barrel overnight after Israeli and Iranian military forces struck each other, then retreated to $94.60 — a 1.6% gain from Friday's close — after Iran announced it was halting offensive operations. The 10-year Treasury yield held near 4.56%.

Morgan Stanley strategist Michael Wilson said the previous session's selloff was a natural pause. "Markets rarely move in a straight line at the pace seen since the March lows. In our view, a correction was inevitable and ultimately healthy if this bull market is going to extend into year-end and pull the S&P 500 to his baseline target of 8,000," Wilson said, according to The Korea Times.

Asian markets fell broadly. South Korea's Kospi index dropped 8.3% in early trading Monday. Japan's Nikkei 225 shed 3.8% after the country's first-quarter growth was revised down to an annualized 1.8% from an earlier estimate of 2.1%. Shanghai stocks lost 1.7% and Hong Kong declined 1.2%.

The 10-year Treasury yield held at 4.56% as afternoon trading continued, with investors watching Middle East developments for further signals on global energy prices and potential inflation pressures, The Korea Times reported.