Chip Stocks Power Nasdaq 100 Past 28,000 as Geopolitical Clouds Lift

Nasdaq 100 hits record above 28,000 as AMD and Intel surge, oil slides on Hormuz truce, and tech stocks rally despite PayPal and Arista drops.

The Nasdaq 100 punched through the 28,000 barrier for the first time on Tuesday, extending its record-breaking run as a potent combination of blockbuster chip earnings and easing geopolitical tensions ignited a fresh wave of buying. Futures contracts pointed to an opening above 28,300 on Wednesday, signaling the rally has further to run.

A Geopolitical Pivot Eases Inflation Fears

The macro backdrop shifted decisively in favor of risk assets after the Trump administration signaled a temporary halt to military operations aimed at securing the Strait of Hormuz. The move, part of a broader effort to revive diplomatic talks with Iran, sent oil prices sliding. WTI crude retreated to around $102 a barrel, while Brent stabilized near $110. The resulting drop in energy costs has soothed inflation anxieties that had weighed heavily on rate-sensitive technology stocks. The yield on the 10-year US Treasury note edged lower to 4.41 percent, providing additional support for growth-oriented equities.

Semiconductor Sector in Overdrive

The rally's engine room is unmistakably the semiconductor industry. Advanced Micro Devices delivered a standout performance, reporting quarterly revenue of $10.3 billion that smashed expectations. The chipmaker also raised its guidance for the current quarter, sending shares surging as much as 18 percent in pre-market trading on Wednesday. Super Micro Computer matched that intensity, jumping 17 percent after hours on the back of robust profit forecasts tied to its AI server business.

Intel added 14 percent, reaching a fresh all-time high amid reports of potential chip discussions with Apple. The Philadelphia Semiconductor Index (SOX) also notched a new record, underscoring the breadth of the sector's strength.

Not All Tech Shares Share the Spoils

The AI-driven euphoria has not lifted every boat. PayPal tumbled nearly 8 percent after announcing plans to cut 20 percent of its workforce as the payments giant looks to streamline operations through artificial intelligence. Arista Networks slumped 12 percent in after-hours trade, with investors punishing the networking company for disappointing margins despite a revenue beat. Meanwhile, mega-caps Alphabet and Microsoft posted more modest gains of around 1 percent.

Technicals Point Higher, But Caution Warranted

From a chart perspective, the Nasdaq 100 has cleared the formidable resistance level of 27,710 points, which now flips into a support floor. The Relative Strength Index (RSI) has climbed to 75, entering overbought territory and raising the possibility of profit-taking in regular trading. Traders will be watching closely for any signs of exhaustion.

Wednesday's session brings fresh catalysts, with the ADP employment report offering a preview of Friday's official jobs data. Strong numbers could reinforce the breakout. After the closing bell, earnings from Walt Disney and Uber will provide further insight into the health of the consumer economy.