Stocks finished higher on Thursday, driven by strong gains in semiconductor shares and a decline in oil prices, as investors looked past renewed tensions between the U.S. and Iran.
The Nasdaq Composite climbed 1.30% to 26,206.89, while the S&P 500 advanced 0.81% to 7,543.64. The Dow Jones Industrial Average gained 139.02 points, or 0.27%, closing at 52,487.41.
Chipmakers led the rally, with the VanEck Semiconductor ETF (SMH) rising 2.5%. Micron Technology surged 4.5%, while Sandisk jumped 7.6%, providing a strong boost to the broader technology sector.
European markets also ended the day in positive territory despite ongoing geopolitical concerns. The pan-European Stoxx 600 index gained 0.8%. In Asia, Japan’s Nikkei 225 rose 1.4%, South Korea’s Kospi added 0.62%, and China’s CSI 300 climbed 2.5%. Hong Kong’s Hang Seng was the region’s underperformer, slipping 0.7%.
Geopolitical tensions remained elevated after the U.S. carried out a second consecutive day of military strikes on Iran, according to U.S. Central Command. The strikes followed Iran’s attacks on commercial vessels near the Strait of Hormuz, a key global shipping route, raising concerns over energy supply disruptions.
Despite the military escalation, oil prices moved lower after President Donald Trump stated that Iran had reached out seeking a potential agreement. Reports also indicated that Qatar and Pakistan are actively mediating efforts to bring both sides back to negotiations.
The latest developments marked a shift in tone after Trump had earlier suggested he was no longer interested in negotiating with Iran and declared that the ceasefire between the two countries had effectively ended following renewed attacks in the region.
Frequently Asked Questions
Why did U.S. stocks rise despite escalating U.S.-Iran tensions?
Markets were supported by strong gains in semiconductor stocks and falling oil prices. Investors also became optimistic after reports that diplomatic efforts between the U.S. and Iran could resume, easing fears of a prolonged conflict.
Why do falling oil prices often benefit stock markets?
Lower oil prices reduce costs for businesses, help ease inflationary pressures, and can improve consumer spending. This often boosts investor confidence and supports broader equity markets.
Why are semiconductor stocks so important to the Nasdaq?
The Nasdaq has a high concentration of technology companies, including major chipmakers. When semiconductor stocks rally, they can significantly lift the overall index due to their large market influence.
How do geopolitical events affect financial markets?
Events such as military conflicts or trade disruptions can increase market volatility by impacting oil prices, inflation expectations, and investor sentiment. Markets may react positively or negatively depending on whether tensions escalate or signs of diplomatic progress emerge.
