Surging like this at this time of night? Midnight Eastern

Created at 98.**.204.45 219 1 0

I was sitting in front of the computer until late planning my vacation, and right before lying down to sleep, I opened my chart app and saw semiconductor stocks surging, which made me wide awake. I hurriedly searched the news and also asked the AI...

Why futures surged tonight

1) Although the Trump-Iran news is really exhausting, news of resuming peace talks between Iran and the U.S. is emerging again. With reports that Iran might seek a diplomatic solution (WSJ report), expectations for oil price stabilization and eased geopolitical risks have refueled. The AI says this is the key trigger for the rebound... Hmm... 🤔🧐😕 🤌 🤌
2) Technical rebound from an oversold state: With the Nasdaq 100 and the SOX index entering technically oversold territory, Derek Peterson of Schwab and others mentioned that it is time for a mean reversion.
3) Eagerly awaited Big Tech/semiconductor earnings releases this week and subsequent buy-the-dip: With earnings announcements from Alphabet/Tesla (Wednesday) and Intel (Thursday) imminent, stocks like Micron, AMD, and Astera Labs rebounded first, building anticipation for a sector earnings confirmation rally...
4) Buy-the-dip sentiment/retail betting: Reports emerged that retail investors are taking bullish positions on memory and neo-cloud-related stocks like Micron and SanDisk.

In conclusion, at this late hour, it seems reasonable to view the surge in the futures market as a combined result of expectations for eased geopolitical risks (Iran), a technical rebound due to short-term oversold conditions, and positioning ahead of this week's earnings season. However, Ed Yardeni is still warning that the SOXX could fall an additional 12%, and retail investors are divided over whether this is the real bottom or just a dead cat bounce. Therefore, Alphabet's earnings on Wednesday and Intel's earnings on Thursday will likely be the key variables determining the next direction for the semiconductor and AI/data center sectors.

 

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