Stocks surged on Thursday as investors welcomed signs of easing geopolitical tensions in the Middle East, a sharp rebound in semiconductor stocks, and optimism surrounding the largest IPO in U.S. history.
The S&P 500 Index (NYSE: SPY) gained 127.31 points, or 1.8%, to close at 7,394.30. The Dow Jones Industrial Average (NYSE: DIA) rose 929.97 points, or 1.9%, to 50,848.75, while the Nasdaq Composite (NASDAQ: QQQ) jumped 640.16 points, or 2.5%, to 25,809.66. The rally marked the strongest single-day advance for the major indexes since April.
Investor sentiment improved after President Trump announced that planned military strikes against Iran had been canceled amid reports of progress toward a potential diplomatic agreement. Hope that the Strait of Hormuz could eventually reopen to normal shipping traffic helped drive oil prices lower and eased concerns about additional inflationary pressure from energy markets.
Technology and semiconductor stocks led the market higher following several days of heavy selling. The Philadelphia Semiconductor Index surged nearly 8%, its strongest one-day gain in more than a year, as investors returned to AI and chip-related names that had been pressured earlier in the week.
Among notable movers, Oracle (NYSE: ORCL) fell more than 8% despite reporting strong earnings. Investors reacted negatively to the company's plans for significantly higher capital expenditures and additional fundraising to support future AI infrastructure investments. Adobe (NASDAQ: ADBE) also traded lower ahead of its earnings release after the closing bell.
Economic data released Thursday showed Producer Price Index (PPI) inflation rose more than expected in May, signaling that price pressures remain elevated despite recent signs of moderation elsewhere in the economy. The report tempered expectations for near-term Federal Reserve rate cuts, though investors largely focused on improving geopolitical developments and the recovery in technology shares.
Markets also continued to monitor developments surrounding SpaceX's highly anticipated IPO, which was priced at $135 per share and valued the company at approximately $1.77 trillion, making it the largest IPO ever completed. The offering generated significant attention across financial markets and helped support broader risk appetite throughout the session.
Investors will now turn their attention toward next week's Federal Reserve meeting, additional inflation data, and the start of another busy stretch of corporate earnings as markets assess whether Thursday's rebound can extend into the second half of June.