U.S. equity markets opened mixed on Thursday, with the Dow Jones Industrial Average edging lower as a rally in semiconductor shares helped counterbalance renewed geopolitical concerns stemming from fresh military exchanges between the United States and Iran.
The Dow slipped 28 points, or 0.05%, while the S&P 500 gained 0.11% and the Nasdaq Composite advanced 0.14%, buoyed by strength in chipmakers. The session followed a mixed Wednesday, where the Dow and S&P 500 closed in the red while the Nasdaq posted a modest gain.
Chip Stocks Lead Rebound
Semiconductor stocks continued their recovery after rebounding in the prior session. The VanEck Semiconductor ETF (SMH) surged 3.88%, led by a 7.2% jump in Micron Technology and a more than 6% gain in Sandisk. The iShares Semiconductor ETF (SOXX) climbed 5.2%, underscoring sustained investor interest in the sector despite lingering questions about the durability of the artificial intelligence-driven rally.
Not all technology shares participated in the upswing. IBM fell 3.4% and Microsoft lost 1.7% following a report that Starbucks adopted AI technology to reduce reliance on both companies. Other software names declined, with ServiceNow down 2.5% and Adobe losing 1.3%. Meta Platforms slipped 3.4% after Reuters reported, citing an internal memo, that the company plans to produce an AI chip starting in September.
Geopolitical Tensions Remain in Focus
Markets continued to monitor developments in the Middle East after the U.S. military launched fresh strikes on Iran to keep the Strait of Hormuz open to shipping. Iran responded with attacks on U.S. assets in Kuwait and Bahrain. President Donald Trump, who earlier declared the interim ceasefire "over," later said he did not expect a return to full-scale war despite the truce's collapse. His comments helped ease some market concerns, though investors remained cautious.
For context on broader market reactions to Middle East tensions, see our coverage of how FTSE 100 Drops 1.3% as Trump Remarks Reignite Middle East Tensions, Oil Surges.
Economic Data and Fed Outlook
Fresh U.S. economic data showed initial jobless claims declined last week, indicating the labor market remained stable despite slower job growth in June. Meanwhile, minutes from the Federal Reserve's June meeting under Chair Kevin Warsh revealed that policymakers ultimately left interest rates unchanged, although a few officials saw a case for raising borrowing costs before agreeing to hold steady. According to LSEG data, traders continue to price in at least one 25-basis-point rate hike by the end of the year.
For more on how rate expectations are shaping markets, read our analysis of Nasdaq Futures Jump 190 Points as Oil Retreats and Chip Stocks Rebound.
Global Markets and Individual Movers
Outside the U.S., European markets edged higher, with the pan-European Stoxx 600 rising 0.55%. Asian markets ended mixed: Japan's Nikkei 225 gained 1.4%, South Korea's Kospi added 0.62%, Hong Kong's Hang Seng fell 0.5%, and mainland China's CSI 300 advanced 2.5%.
Among individual stocks, Levi Strauss fell 3.5% despite raising its annual sales forecast, while PepsiCo declined 4.6% even after reporting second-quarter revenue that exceeded analysts' estimates.
For a broader perspective on how geopolitical risks are affecting asset classes, see Gold Slips as Iran Oil Spike Fuels Fed Rate Fears, Overwhelming Haven Appeal.
This article is for informational purposes only and does not constitute financial advice.
