Wall Street Brief (July 11): US equities rose modestly on Friday, with SK Hynix listing on the Nasdaq as markets continued to focus on the AI supply chain; Middle East risk concerns eased, market sentiment recovered, and sectoral performance further diverged.

Summary: US stocks posted modest gains on Friday, with the S&P 500 up 0.42%, the Nasdaq up 0.29%, the Dow Jones Industrial Average up 0.29%, and the Russell 2000 down 0.49%. The S&P, Nasdaq, and Dow held steady, while small caps significantly lagged, reflecting continued investor preference for large-cap and higher-certainty assets. The VIX dropped to 15.03, falling 5.11% on the day, indicating ongoing sentiment recovery without entering overheated territory. Market dynamics were primarily driven by a retreat in Middle East risk premiums, with oil prices and safe-haven demand cooling further, thereby supporting equity resilience. Intraday flows remained concentrated in leading tech names and large-cap benchmarks, with sectoral divergence intensifying. Across major asset classes, the 10-year U.S. Treasury yield rose 0.66%, gold fell 0.10%, crude oil declined 0.42%, Bitcoin gained 1.41%, and the U.S. Dollar Index edged up 0.03%.

I. Major Events

1. Trump signals de-escalation, Middle East risks continue to ease

On July 10, U.S. officials urged Iran to publicly guarantee the safety and openness of the Strait of Hormuz, while Trump reiterated his stance against prolonged militarization of the situation. This goes beyond mere verbal reassurance, as it directly addresses the most sensitive pricing link in global energy transportation. As markets continue to downgrade the probability of uncontrolled conflict and supply disruptions, both crude oil prices and safe-haven demand have retreated in tandem, alleviating some of the inflationary and valuation pressures seen in recent days.

2. SK Hynix lists on U.S. markets, spotlight remains on the AI supply chain

On July 10, SK Hynix listed on the Nasdaq via American Depositary Receipts (ADRs), raising $26.5 billion—the largest-ever U.S. offering by a foreign company—and its shares jumped approximately 13% on the first day. The significance of this transaction lies not only in its scale but also in how it refocused global capital on AI infrastructure, particularly memory and data center components. For U.S. equities, this further bolstered the appeal of the AI hardware theme; even though the memory sector did not rally broadly that day, capital continued flowing into high-conviction, large-cap tech assets.

II. Major Trends

On Friday, the four major indices did not show significant volatility, but internal divergence was clear. The S&P 500, Nasdaq, and Dow Jones all maintained upward momentum, while the Russell 2000 weakened, indicating that market strength is not broadly diffused but remains concentrated in large-cap stocks and core technology sectors.

From a medium-term perspective, growth-style assets continue to outperform. QQQ has risen 18.86% over the past three months, maintaining its lead over DIA’s 10.12%; SPYG gained 15.01%, significantly outpacing SPYV’s 7.44%. The dominant force behind this rally remains growth and technology.

In the short term, SPY rose 3.56% over two weeks, while RSP gained 1.90%, still lagging behind SPY. This suggests that although market breadth has not deteriorated noticeably, leadership remains with top-weighted names. IWM declined 1.28% over two weeks, continuing to underperform in the near term; however, it is still up 13.55% over three months, surpassing SPY’s 11.40%, indicating that medium-term risk appetite remains intact—investors have simply rotated back toward more stable segments in the short run.

III. Market Sentiment

Market sentiment continued to recover on Friday. The VIX dropped to 15.03, falling 5.11% in a single day; the CNN Fear & Greed Index rose to 49 from a previous reading of 46. Market anxiety is easing, though sentiment has not yet turned clearly optimistic—it appears more like a mild rebound.

The CBOE total put/call ratio stood at 0.81, with the index options put/call ratio at 1.01 and the equity options put/call ratio at 0.67. Risk appetite on the stock side continues to recover, but hedging activity on the index side has not fully subsided—consistent with the day’s market structure, where large caps outperformed small caps.

IV. Market Scan

1. Index ETFs:Friday’s market divergence was primarily between large and small caps. The Dow (DIA), S&P 500 (SPY), and Nasdaq-100 (QQQ) all maintained modest gains, while the Russell 2000 (IWM) notably lagged. This structure indicates that capital has not broadly rotated into small- and mid-cap stocks but remains focused on large-cap names and core tech sectors with higher earnings visibility.

2. Sector Performance:Materials (XLB) led sector performance with a 1.25% gain, followed by Consumer Staples (XLP) up 1.11% and Communication Services (XLC) up 1.02%; Health Care (XLV) was the weakest, down 0.82%. Sector-level volatility remained relatively contained, with no broad-based rotation into traditional industries. At the sub-industry level, Oil Services (OIH) rose 1.53%, and Copper Miners (COPX) gained 1.51%. On the downside, Biotechnology (XBI) fell 3.20%, Cybersecurity (CIBR) dropped 2.52%, DRAM stocks declined 2.05%, and Software (IGV) slid 1.57%. Tech performance was not universally strong—the day’s flows were concentrated in a select few high-conviction, leading names.

3. The Magnificent Seven Tech Stocks:Among the Magnificent Seven tech stocks, Meta surged 5.97%, NVIDIA rose 4.03%, and Netflix declined 2.78%. Big tech did not move in lockstep, but capital continues flowing into companies most directly tied to the AI narrative.

4. U.S.-Listed Chinese Stocks:Chinese ADRs did not establish an independent trend. JD.com rose 1.66%, showing relative stability, while NetEase fell 4.39%, the weakest performer. Investor focus remains primarily on U.S. domestic market leaders.

5. Cryptocurrencies:Bitcoin rose 1.41%, extending its rebound; Circle (CRCL) gained 4.97%, MicroStrategy (MSTR) advanced 0.80%, while Marathon Digital (MARA) dropped 4.69%. Crypto assets themselves continued to recover, but related equities did not strengthen in unison—stablecoin and mining stocks remain divergent in their performance.

$S&P 500 Index (.SPX.US)$ $SPDR S&P 500 ETF (SPY.US)$ $NASDAQ 100 Index (.NDX.US)$ $Invesco QQQ Trust (QQQ.US)$ $Dow Jones Industrial Average (.DJI.US)$ $State Street® SPDR® Dow Jones Industrial Average® ETF Trust (DIA.US)$ $Russell 2000 Index (.RUT.US)$ $iShares Russell 2000 ETF (IWM.US)$ $Roundhill Magnificent Seven ETF (MAGS.US)$ $USD (USDindex.FX)$ $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $XAU/USD (XAUUSD.CFD)$ $SPDR Gold ETF (GLD.US)$ $CBOE Volatility S&P 500 Index (.VIX.US)$ $CME-Bitcoin RR Futures (AUG6) (BTCmain.US)$ $iShares Ethereum Trust ETF (ETHA.US)$ $NVIDIA (NVDA.US)$ $Tesla (TSLA.US)$ $Meta Platforms (META.US)$ $Amazon (AMZN.US)$ $Alphabet-C (GOOG.US)$ $Microsoft (MSFT.US)$ $Apple (AAPL.US)$

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