US equities opened sharply higher on Thursday, with the Dow Jones Industrial Average climbing approximately 349 points (0.68%) as investors welcomed signs of de-escalation in the Middle East and a rebound in semiconductor stocks. The S&P 500 gained 1.03%, while the Nasdaq Composite advanced 1.18%, led by strength in chipmakers.
The rally follows Wednesday's selloff triggered by the Federal Reserve's first policy meeting under new Chair Kevin Warsh. The central bank held its benchmark rate steady but signaled a more hawkish stance, with nine of 18 officials now projecting a rate increase in 2026. Warsh declined to submit his own forecast, adding to policy uncertainty. According to CME Group's FedWatch tool, market expectations for a quarter-point hike in September jumped to 50% from 27% on Wednesday.
Middle East Peace Hopes Boost Sentiment
Investor sentiment improved as oil prices fell to their lowest levels in over three months, easing inflation concerns. The United States and Iran released the text of an interim agreement extending the April ceasefire by 60 days, providing a window for further negotiations toward a final peace deal. This diplomatic progress helped offset worries about tighter monetary policy.
Recent economic data also supported confidence. May retail sales rose more than expected, driven by increased purchases of automobiles and other goods despite higher gasoline prices.
Semiconductor Stocks Lead the Charge
Technology and semiconductor shares powered Thursday's advance. Intel surged more than 10% after President Donald Trump announced that Apple had agreed to collaborate with Intel on designing and manufacturing chips in the United States. Other chipmakers followed: Nvidia gained over 1.2%, while Micron Technology and Marvell Technology each rose more than 5%. The iShares Semiconductor ETF climbed over 4.6%.
This rally contrasts with recent weakness in the sector. For context, memory chip stocks plunged up to 10% earlier this month on AI debt fears and rate hike bets, and the AI and chip rout sank the Nasdaq 2.2% just days ago.
Notable Movers and Market Events
Shares of Rumble jumped 13% after rebranding as RUM Group and completing its acquisition of German AI cloud company Northern Data. Smith & Wesson gained over 23% following stronger-than-expected fourth-quarter sales. On the downside, Accenture fell more than 15% after trimming its annual revenue forecast and announcing a $4.18 billion deal to acquire majority stakes in Dragos, runZero, and NetRise.
Investors are also preparing for the quarterly expiration of stock options, index options, and futures contracts—known as "triple witching"—which can amplify trading volumes and volatility.
This article is for informational purposes only and does not constitute financial advice.
