AI Stock Rally Offsets U.S.-Iran Military Escalation

Global stock markets rallied on July 9 and 10, 2026, as investor enthusiasm for artificial intelligence outweighed geopolitical instability. The Nasdaq Composite surged 1.3% on Thursday, driven by Micron Technology's plan to invest over $250 billion in the U.S. by 2035 and reports that Meta Platforms intends to manufacture AI chips. On Friday, South Korean chipmaker SK Hynix completed a U.S. market debut via American Depositary Receipts, raising approximately $26.5 billion.

These financial gains occurred during a military escalation between the Federal government of the United States and Iran. Following U.S. airstrikes on Wednesday, Iran launched retaliatory strikes against U.S. assets in Kuwait, Qatar, and Bahrain. President Donald Trump initially declared that a ceasefire was "over," though he later stated that Iranian officials had contacted the U.S. to seek a diplomatic resolution. Despite the conflict and reduced shipping through the Strait of Hormuz, oil prices remained relatively low as traders viewed the situation as a managed escalation.

In Asia, the Nikkei 225 and Kospi rose sharply on Friday, while the Government of Japan sought to support the yen by encouraging pension funds to increase domestic investments. Meanwhile, U.S. investors shifted focus toward upcoming earnings reports and the Federal Reserve's interest rate path. Under Chair Kevin Warsh, the Federal Reserve held rates steady in June, though FOMC minutes revealed inflation concerns and a market-priced probability of a rate hike later this year.