U.S. stocks rose on Thursday, boosted by a rally in chip stocks, after President Donald Trump called off strikes on Iran planned for last night and said the U.S. would soon sign a deal with the country.
The S&P 500 rose 1.75% to close at 7,394.30, while the Nasdaq Composite added 2.54% to 25,809.66. The Dow Jones Industrial Average rose by 929.97 points, or 1.86%, and stopped at 50,848.75.
Trump told reporters in the Oval Office that “we have an agreement that Iran will never have nuclear weapons.” He continued: “We have a signing coming soon and the documents are in a fairly final form. It should be done fairly quickly.”
Stocks rose earlier Thursday after Trump said in a post on Truth Social that he had “cancelled the planned attacks and bombings of Iran tonight.”
“The naval blockade will remain in full force until this transaction is finalized – the time and place of signing will be announced shortly,” he added.
West Texas Intermediate crude oil futures fell 2.58% to settle at $87.71 a barrel after Trump’s announcement. Brent crude oil futures fell 2.92% to end at $90.38 per barrel. Both continued to fall after the deal, SEEbiz reports.
Markets were tense before those comments. Oil prices rose after Trump said in a separate post on Truth Social that the US would attack Iran “VERY HARD TONIGHT.” He also said: “At some point in the not too distant future, we will seize Kharg Island and other points of oil infrastructure and take complete control of their oil and gas markets.”
“The markets don’t seem to be upset” by the conflict in the Middle East, said Thomas Martin, senior portfolio manager at Globalt Investments. “The inflation report that we got doesn’t show that the higher oil price is really affecting other areas, so the fundamentals of the economy are still pretty strong. It’s all kind of status quo for the markets.”
The producer price index rose by 1.1% in May, the Bureau of Labor Statistics reported on Thursday. That’s more than 0.7% of economists polled by Dow Jones. Core inflation – which excludes volatile food and energy prices – was 0.4%, below the Dow Jones forecast of 0.5%.
The recovery of Micron Technology, Advanced Micro Devices and Intel gave momentum to the market. The iShares Semiconductor ETF ( SOXX ) rose more than 8%. The chip ETF came under pressure again earlier this week after a 10% drop on Friday that led many investors to question whether the sector’s parabolic run is over. Bank of America raised Intel’s rating from underperform to buy on Thursday, and the stock responded with a 9% gain.
