Stocks maintain gains after whipsawing as traders digest war updates

Health insurance stocks are surging after the Centers for Medicare & Medicaid Services said it plans to boost Medicare Advantage and Part D payments by 2.48% in calendar year 2027.

The likes of CVS, Humana, UnitedHealth, Molina Healthcare, Oscar Health, and Elevance Health are gaining in postmarket trading.

Wall Street analysts had anticipated that rates for 2027 would go up between roughly 1% and 1.5%.

These stocks had gotten crushed in late January when the Trump administration proposed relatively flat federal payment rates.

Insurance companies that provide government-sponsored plans, like Medicare Advantage, faced headwinds from higher-than-expected costs in 2025.

Dow, Inc. and LyondellBasell — two petrochemicals stocks that surged as markets priced in shortages due to the closure of the Strait of Hormuz — should decline as investors focus on the long-term outlook for normalized petrochemical prices once the war resolves, Bank of America analysts wrote in a note downgrading the two stocks Monday.

BofA moved its rating on the shares from “neutral” to “underperform,” writing:

“Over time, as chemical markets normalize, we expect 1) investor focus to shiſt back to ‘normal’ or ‘sustainable’ earnings profiles and 2) the conflict to resolve without material asset rationalization, both of which likely bias shares lower over the next twelve months.”

Analysts also lowered their stance on another petrochemicals and building materials stock, Westlake, to “neutral” from “buy.”

While cutting those ratings, BofA actually raised its more near-term price targets for the shares. It upped LyondellBasell to $68 from $55, and Dow to $35 from $31.

But those price targets still imply declines of more than 10% compared to where both shares were trading late Monday morning. Both stocks are up roughly 30% since the start of the Iran war.

US memory stocks are forgetting about a negative catalyst and remembering what it’s like to lead major indexes.

Shares of Micron, Western Digital, Sandisk, and Seagate Technology Holdings are soaring in early trading on Monday.

Morgan Stanley reiterated its confidence in hard drive disk sellers on Monday, saying that recent channel checks “point to strengthening demand, elongating visibility, and most importantly, a much stronger pricing outlook.”

Analyst Erik Woodring boosted his price target on Seagate to $582 from $468 and on Western Digital to $380 from $369.

Aside from that, there’s no real news supporting their advance, so this looks to be a case of, “We now return to our regularly scheduled programming,” a world in which memory stocks benefit from a substantial supply/demand imbalance and enjoy ample pricing power thanks to the AI boom.

The group slumped in early March when the US-Israeli attacks on Iran began, as the war sparked an unwind of popular trades, and then sold off again late in the month after Google published details on its TurboQuant algorithm, which could decrease memory intensity in data center environments.

It’s worth noting that after March 25 was when the US stock market, in general, really hit the skids. So after that negative catalyst, the group was getting caught up in a tide of risk-off activity.

Wall Street analysts at Bernstein and Bank of America, among others, suggested the TurboQuant-inspired sell-off in the group was overdone.

“Despite TurboQuant, GOOGL capex still up +100% YoY,” wrote BofA analyst Vivek Arya, who added that Google “has been publishing similar techs over the last 18 months.”

With Monday’s early gains, these stocks (ex Micron) have now recovered all their post-TurboQuant declines.

Applied Optoelectronics is soaring on Monday after a hyperscaler upped demand for its components, which help servers in data centers relay information.

After the close on Thursday, the optics and networking company announced that a key customer ordered an additional $71 million worth of 800-gigabit single-mode data center transceivers. Per the press release, orders from this buyer now total $124 million since mid-March, with this commitment doubling AAOI’s backlog for this customer.

The stock is up more than 5% in premarket trading; other names in the industry like Coherent, Lumentum, and POET Technologies are also trading well in the green.

Shares of AAOI ended Thursday up 20% before this news dropped, with the industry having displayed strong momentum as of late to reaffirm its status as one of the few areas of the AI trade that investors have loved in 2026.

“We anticipate completing delivery of the initial order in the third quarter, with this new order by end of this year,” said Dr. Thompson Lin, founder, chairman, and CEO of Applied Optoelectronics. “We also recently shipped the first 10,000 units of an 800G single-mode transceiver order to another hyperscale datacenter customer.”