Wall Street staged a powerful rebound on Thursday, with major indexes recouping much of the losses from Wednesday's selloff. The rally was fueled by a resurgence in technology shares, particularly semiconductor and artificial intelligence stocks, and a sharp drop in oil prices after President Donald Trump called off planned military strikes on Iran. The S&P 500 surged 1.75% to close at 7,394.30, while the Dow Jones Industrial Average rose 1.86% to 50,848.38. The Nasdaq Composite led the charge, jumping 2.54% to 25,809.66.
Geopolitical Tensions Ease, Oil Retreats
The market's upward momentum accelerated following a Reuters report that President Trump had canceled planned strikes on Iran and that diplomatic talks with Iran and other Middle Eastern nations had made progress. This development significantly eased concerns about a broader conflict in the region, sending oil prices tumbling. U.S. crude oil fell 3% to $87.33 per barrel, while Brent crude dropped 3.19% to $90.13. The decline in oil prices helped alleviate one of Wall Street's primary inflation worries, which had been exacerbated by the earlier spike in energy costs.
Tech and Chip Stocks Lead the Charge
Technology shares were the standout performers, with the S&P 500 tech index bouncing back after entering correction territory. According to Reuters, the tech index had fallen 11% from its June 2 closing high before buyers stepped in. “Our technical indicators are looking relatively oversold here,” said Robert Phipps of Per Stirling Capital Management in Austin. “Just as we had gone up too far, too fast, we came down too far, too fast.”
Semiconductor stocks were particularly strong, with several names posting double-digit gains. SanDisk (SNDK) surged 14.35%, KLA Corporation (KLAC) added 13.20%, Lam Research (LRCX) climbed 12.73%, Micron Technology (MU) moved up 11.29%, and Applied Materials (AMAT) rose 10.86%. These chipmakers were among the top performers in the S&P 500.
Oracle Bucks the Trend
Despite the broad rally, Oracle (ORCL) was a notable laggard, with shares falling 8.47%. The decline came after the company released its fiscal 2027 capital spending plans, which exceeded analyst expectations, raising concerns about future costs. Adobe (ADBE), Autodesk (ADSK), and PTC (PTC) were also among the S&P 500's weakest performers during the session.
Inflation Data Remains in Focus
While stocks rallied, inflation concerns persisted. The Labor Department reported that the Producer Price Index (PPI) for final demand rose 1.1% in May and was up 6.5% year-over-year, the largest annual increase since November 2022. According to the Bureau of Labor Statistics, nearly 80% of the monthly increase was driven by a 2.8% gain in final-demand goods, primarily due to higher gasoline prices, which surged 23.4%.
This wholesale inflation data followed Wednesday's Consumer Price Index (CPI) report, which showed consumer prices climbed 0.5% in May and were up 4.2% year-over-year. Core CPI, which excludes food and energy, increased 2.9% over the past 12 months. Investors remain on edge regarding the Federal Reserve's next policy move, as persistent inflation could delay any potential rate cuts.
Treasury Yields Decline
Treasury yields edged lower as geopolitical tensions eased. The 10-year U.S. Treasury yield fell 6.3 basis points to 4.477%, while the two-year yield, which is more sensitive to Fed rate expectations, dropped to 4.077%. Lower yields provided additional support for growth stocks, which tend to be more sensitive to interest rate outlooks.
Market Breadth Improves
The rally was broad-based, with advancing stocks outpacing decliners by a 2.62-to-1 ratio on the New York Stock Exchange and 2.48-to-1 on the Nasdaq, according to Reuters. This suggests the recovery extended beyond just mega-cap tech names, offering a more encouraging sign for the overall market.
