U.S. stocks staged a strong rally late in Thursday's session, with the Dow Jones Industrial Average soaring more than 850 points. Oil prices fell sharply after President Trump announced the cancellation of a planned military strike against Iran. Semiconductor stocks rebounded.
The Dow gained 853.19 points, or 1.71%, to close at 50,771.97. The Nasdaq Composite advanced 463.19 points, or 1.84%, to 25,632.69. The S&P 500 rose 102.46 points, or 1.41%, finishing at 7,369.45.
President Trump posted on Truth Social Thursday, stating, "In light of the discussions with the Islamic Republic of Iran being submitted to and approved by the Supreme Leader of Iran, I, as President of the United States, have cancelled the strike and bombing attack that was scheduled for tonight against Iran."
He continued, "All relevant parties, including the United States, Israel, Saudi Arabia, the UAE, Qatar, Turkey, Pakistan, Bahrain, Kuwait, Jordan, Egypt, and others, have fully approved the discussion content and final terms from concept to detail. The maritime blockade will remain fully effective until this agreement is finalized—the time and place for signing will be announced soon."
Following Trump's announcement, West Texas Intermediate crude futures fell 3% to around $86 per barrel. Brent crude futures also dropped 3% to approximately $89 per barrel.
Earlier in the day, markets were tense after Trump said in another Truth Social post that the U.S. would "attack Iran fiercely tonight," causing oil prices to rise. He also stated, "At some point in the near future, we will occupy Kharg Island and other key oil infrastructure points and take full control of its oil and gas market."
Thomas Martin, senior portfolio manager at Globalt Investments, noted that markets did not seem "panicked" by the Middle East conflict. "The inflation reports we've seen haven't shown that rising oil prices are truly spilling over into other areas, so the economic foundation remains quite solid. For the market, this is essentially a status quo situation."
The Bureau of Labor Statistics reported Thursday that the Producer Price Index for May rose 1.1%, exceeding the 0.7% increase expected by economists surveyed by Dow Jones. Core inflation, which excludes volatile food and energy prices, was 0.4%, lower than the Dow Jones forecast of 0.5%.
A rebound in shares of Micron Technology, Advanced Micro Devices, and Intel provided market momentum. The iShares Semiconductor ETF climbed 6%. The chip ETF faced renewed pressure this week after plunging 10% last Friday, leading many investors to question whether the sector's parabolic rally had ended. Bank of America upgraded Intel from "underperform" to "buy" on Thursday, sending its shares up 7%.
Market enthusiasm is building ahead of SpaceX's debut on Friday, which could highlight expected growth in AI infrastructure spending. Some traders believe recent weakness in semiconductor stocks is due to investors selling holdings to make room for the IPO, which is valued at around $1.8 trillion and would be the largest debut in history.
However, not all tech stocks performed well on Thursday. Oracle shares fell 11% after the software giant announced plans to raise an additional $20 billion in equity and debt to fund its AI infrastructure buildout.
Stocks had fallen on Wednesday, pressured by another sharp drop in the semiconductor sector and escalating tensions with Iran.
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