Wall Street rallies as Trump cancels planned Iran strikes; SpaceX IPO in focus

NEW YORK: U.S. stocks closed sharply higher on Thursday after President Donald Trump said planned American strikes against Iran had been cancelled, easing investor concerns over further escalation in the Middle East conflict.

The Dow Jones Industrial Average rose 929.97 points, or 1.86%, to 50,848.75. The S&P 500 gained 127.31 points, or 1.75%, to close at 7,394.30, while the Nasdaq Composite advanced 640.16 points, or 2.54%, to 25,809.66.

The three major indexes recorded their strongest daily percentage gains since April 8, when the United States and Iran agreed to a temporary ceasefire.

Markets extended gains after Trump said the planned strikes had been called off. He later told reporters that the United States and Iran could reach a peace agreement as early as this weekend, potentially allowing shipping traffic through the Strait of Hormuz to resume.

Technology shares led the rebound, recovering from losses recorded earlier in the week. The Philadelphia Semiconductor Index climbed 7.9%, marking its biggest one-day gain since April 2025 and providing the largest boost to the S&P 500.

Investor attention has now shifted to SpaceX, which is expected to begin trading on the Nasdaq on Friday. The Elon Musk-led company priced its initial public offering at $135 per share on Thursday, raising a record $75 billion through the sale of 555.56 million shares and securing a valuation of $1.77 trillion.

Market participants said the performance of SpaceX shares after listing would be closely watched as a gauge of investor appetite for high-growth technology companies.

Among individual stocks, Oracle fell 8.5% after forecasting fiscal 2027 capital expenditure above Wall Street expectations.

Economic data released on Thursday showed U.S. producer prices rose more than expected in May, resulting in the largest annual increase in more than three years. Separate data showed a slight rise in new unemployment benefit claims.

Despite inflation concerns, the Federal Reserve is widely expected to keep interest rates unchanged at its policy meeting next week. Financial markets are currently pricing in at least one 25-basis-point rate increase before the end of the year.

Market breadth remained positive, with advancing stocks outnumbering decliners by nearly three-to-one on both the New York Stock Exchange and Nasdaq.