Tech Stocks See Strong Valuation Recovery. Philadelphia Semiconductor Index Surges Over 4% Nearing Record Highs, Growth Stocks See Best Rebound Window

Tradingkey - On June 15, during the early trading session for U.S. stocks, the three major indices strengthened across the board, with the Nasdaq Composite leading the gains. The Philadelphia Semiconductor Index, often seen as a bellwether for tech stocks, rose more than 4% at one point, nearing an all-time high.

As of press time, the Nasdaq Composite was up 1.07% at 51,750.53 points; the S&P 500 rose 1.49% to 7,542.2 points; and the Dow Jones Industrial Average climbed 2.34% to 26,494.17 points.

Among megacap tech stocks, SpaceX (SPCX) rose 7.51%, Meta Platforms (META) gained 4.68%, Intel (INTC) advanced 3.86%, Amazon (AMZN) increased 3.37%, Alphabet Inc. - Class A (GOOGL) climbed 2.46%, Broadcom (AVGO) rose 2.42%, Microsoft (MSFT) went up 2.04%, NVIDIA (NVDA) gained 2.02%, Apple (AAPL) advanced 1.70%, Tesla (TSLA) rose 1.24%, and Netflix (NFLX) was up 0.55%.

The Philadelphia Semiconductor Index surged 4.17% to 13,927 points. Among its 30 constituents, 29 rose. Micron Technology (MU) jumped 8.27%, Advanced Micro Devices (AMD) rose 8.13%, Qualcomm (QCOM) gained 5.65%, Lam Research (LRCX) advanced 5.17%, and Applied Materials (AMAT) increased 4.07%.

At the sector level, chip stocks, AI application stocks, and AI PC stocks were among the top gainers; oil and natural gas stocks were among the biggest losers.

Based on market performance, tech and growth stocks are the preferred choices during the market's rebound and recovery phase amid easing geopolitical tensions. The core driver is the de-escalation of the US-Iran conflict, which lowered interest rate expectations and triggered a valuation recovery in tech stocks, aligning with the specific pricing principles of the tech sector.

This is a textbook market scenario where "geopolitical risk premiums quickly recede, and global assets simultaneously initiate a new round of repricing."

On the news front, the US and Iran have officially completed negotiations, and the Strait of Hormuz will resume free passage, with the US Navy immediately lifting maritime blockades on Iranian ports. Iran's Supreme National Security Council formally confirmed early on the 15th that both sides had reached a Memorandum of Understanding on a ceasefire, agreeing to a "permanent and immediate cessation of military operations on all fronts, covering the entire territory of Lebanon." Pakistani Prime Minister Shehbaz Sharif confirmed that the official signing ceremony will be held on June 19 in Switzerland.

According to data from the CME FedWatch Tool, the market's priced-in probability for a Fed rate hike in December has fallen to 64% from 69% last week. Although it is too early to say that "rate cut trades" have restarted, the risk of further hikes has clearly receded, creating room for a periodic market recovery.

In simple terms, the value of tech companies mostly stems not from current profits, but from earnings expectations 3-5 years or even further into the future. To price these stocks, future profits must be discounted to "present value." The interest rate used for this is like a "discount factor": the higher the rate, the less valuable future money is when discounted to today, putting more obvious pressure on stock prices.

Following the de-escalation of the US-Iran conflict, market risk-off sentiment cooled rapidly. Concerns that geopolitical risks would drive up inflation and force the Fed to hike rates also eased, leading to a pullback in the 10-year Treasury yield, the global benchmark for asset pricing. As interest rate benchmarks decline, the "discount factor" for tech stocks' future value narrows, naturally raising the present value of future earnings.

Compared to traditional industries, tech stock earnings are highly concentrated in the long term, making them more sensitive to interest rate changes. Their valuation compression is most pronounced during rate-hike cycles; conversely, when interest rate expectations fall, they show the greatest elasticity in valuation recovery. This is the core reason tech stocks became the leading sector following the easing of the geopolitical conflict.