Shares of the $118 billion State Street Technology Select Sector SPDR ETF jumped 3.2% to $190.79 in pre-market trading Sunday after the U.S. and Iran agreed to a ceasefire extension that could reopen the Strait of Hormuz — the narrow waterway through which roughly a fifth of the world's energy flows. Crude oil prices fell over 4% to their lowest levels in over three months , with Brent crude dropping 3.6% to $84.21 per barrel . For a fund loaded with growth stocks whose valuations depend heavily on interest-rate expectations, cheaper oil translates directly into lower inflation fears and a friendlier borrowing environment.
• Falling Oil Relieves the Pressure That Has Squeezed Tech All Year
Oil prices remain up roughly 40% since the conflict began, as Tehran forced the effective closure of the narrow waterway.
The oil price spike caused U.S. gasoline prices to soar to their highest levels since 2022, adding to GOP political peril ahead of midterms. Today's drop to $81.38 WTI partly reverses that damage, but crude is still well above pre-war levels — meaning inflation relief is real but incomplete.
• XLK's Chip-Heavy Portfolio Stands to Gain the Most
XLK holds 42.11% in Semiconductors & Semiconductor Equipment versus 26.69% in Software.
Its top three holdings — Nvidia at 15.50%, Apple at 13.63%, and Microsoft at 10.05% — account for roughly 39% of assets. Semiconductor names have been whipsawed by Iran-linked volatility; the Nasdaq fell 4% on June 4 in its worst day since April 2025 as traders fled chip stocks . Today's reversal rewards investors who held through that turbulence, but concentration risk remains elevated.
• The Warsh Fed Meets Tomorrow — and Markets May Be Getting Ahead of Themselves
June 16–17 will be Warsh's first FOMC meeting as chair.
Inflation reached a three-year high in April and has been running well above the Fed's 2% target for months.
The FOMC has held the federal funds rate steady at 3.50%–3.75% for its past three meetings , and the CME FedWatch tool shows almost no chance for a 2026 rate cut — and factors in higher chances of an inflation-fighting rate hike. Cheaper oil helps Warsh's hand, but one deal does not erase months of above-target prices.
• A Tentative Deal Is Not a Permanent One
Iran's peace plan includes a demand for Washington to accept its uranium enrichment programme — a likely deal-breaker given Trump's stated war aims. Over 800 tankers are currently stuck in the Strait; insurers and shipping operators need to see movement for the oil-price drop to be sustained. If talks collapse, XLK's geopolitical discount returns fast. The +8% swing from last week's $176.63 low prices in a lot of optimism that diplomacy hasn't yet earned.