Wall Street rises as chip stocks rally, Iran deal eases inflation concerns

NEW YORK: Wall Street’s major indexes closed higher on Thursday, led by semiconductor shares, as easing oil prices after a United States-Iran interim agreement helped reduce inflation concerns.

The Dow Jones Industrial Average rose 72.15 points, or 0.14%, to 51,564.70. The S&P 500 gained 80.48 points, or 1.08%, to 7,500.58, while the Nasdaq Composite advanced 496.28 points, or 1.91%, to 26,517.93.

The Philadelphia semiconductor index outperformed the broader market, rising 6.4%. Intel shares hit a record high and closed 10.6% higher after United States President Donald Trump said Apple had agreed to work with Intel on chip design and manufacturing in the United States.

Oil prices fell earlier in the session to their lowest levels since early March after the United States and Iran signed an interim agreement extending the April ceasefire by 60 days to allow more time for a final deal.

The decline in oil prices helped ease inflation concerns after crude had risen sharply since the war began in late February. The first ships also started moving through the Strait of Hormuz, where oil, gas, fertiliser and other cargo shipments had been disrupted.

Investor sentiment had weakened on Wednesday after Federal Reserve Chair Kevin Warsh signalled a tougher stance on inflation and other policymakers indicated that borrowing costs could rise further.

Traders were pricing in about a 50% chance of a 25-basis-point interest rate increase as early as September and around a 20% probability of a 50-basis-point increase, according to CME Group’s FedWatch tool.

Five of the 11 major S&P 500 sectors closed higher on Thursday. Technology led the gains with a 2.7% rise, followed by consumer discretionary, which advanced 1.8%.

Travel-related stocks also gained as lower fuel prices supported airlines and cruise-line operators. The Dow Jones Transport average rose 0.5%.

The small-cap Russell 2000 index advanced 2% and ended at a record closing high.

For the week, the S&P 500 gained 0.93%, the Nasdaq rose 2.43% and the Dow added 0.71%. United States markets will remain closed on Friday for the Juneteenth holiday.

Labour Department data showed that the number of Americans filing new claims for unemployment benefits fell last week as layoffs remained low.

The S&P 500 software and services sector declined 0.7% after touching its lowest level in more than two months. Accenture dropped 18% after cutting the upper end of its annual revenue forecast.

Shares of Cognizant Technology Solutions, Gartner and IBM fell between 4.5% and 10.5%.

Kroger shares lost 8.4% after the grocery chain reported first-quarter profit below expectations and maintained its annual forecasts.

SpaceX shares fell 3.6% for a second straight session after the space and artificial intelligence company had rallied in its first few days of trading following its market debut last Friday.

Thursday also marked the quarterly expiry of stock options, index options and futures, known as triple witching, which can increase trading volumes and volatility.

Trading volume on United States exchanges reached 33.59 billion shares, compared with the 20-session average of 21.83 billion.

Advancing stocks outnumbered decliners by 1.72-to-1 on the New York Stock Exchange, where there were 286 new highs and 183 new lows. On the Nasdaq, 3,136 stocks rose and 1,773 fell, with advancers leading decliners by 1.77-to-1.

The S&P 500 recorded 29 new 52-week highs and 27 new lows, while the Nasdaq Composite posted 123 new highs and 152 new lows.