U.S. stocks closed higher Thursday as investors welcomed another sharp decline in oil prices tied to renewed optimism surrounding a potential U.S.-Iran agreement, easing fears that an energy-driven inflation shock could further pressure the economy and Federal Reserve policy.
The Dow Jones Industrial Average rose 276.31 points, or 0.55%, to 50,285.7. The S&P 500 gained 12.75 points, or 0.17%, to 7,445.72, while the Nasdaq Composite added 22.74 points, or 0.09%, to 26,293.1.
The CBOE Volatility Index, or VIX, fell 0.52 points, or 2.98%, to 16.92, signaling easing investor anxiety. Crude oil futures for July delivery settled near $97.35 a barrel, down 0.93% on the session after a volatile trading day.
Stocks spent much of the morning under pressure as crude briefly climbed above $100 a barrel following reports that negotiations between Washington and Tehran had stalled. But sentiment reversed in the afternoon after Iranian media reports suggested progress toward a potential agreement, sending oil sharply lower and helping equities recover into the close. Yahoo Finance reported that markets rebounded after hopes emerged that a memorandum between the U.S. and Iran could be announced soon.
WATCH:
📺 Could Nvidia’s Earnings Launch the First $8 Trillion Company in History?
📺 The Nvidia Blindspot: Where the Next 80% of AI Profits Are Hiding
📺 5% Treasury Yields Could Crack AI-Fueled Stock Rally
Falling oil prices helped offset concerns stemming from rising borrowing costs. The Wall Street Journal reported mortgage rates climbed to their highest level in nine months, 6.5% on a 30 year fixed mortgage, dealing another blow to the crucial spring housing market as elevated Treasury yields continue to tighten financial conditions.
Technology and semiconductor-related shares were mixed, though investors continued to rotate into companies tied to long-term artificial intelligence infrastructure spending. Technology and semiconductor-related shares were mixed, though investors continued to rotate into companies tied to long-term artificial intelligence infrastructure spending. The Trump administration plans to award roughly $2 billion in grants to nine quantum-computing companies, $1B to IBM, to expand its quantum computing ambitions.
IBM said it plans to invest an additional $1 billion of its own capital alongside the government funding to establish what it describes as America's first specialized quantum chip manufacturing facility. The initiative will operate under a newly formed IBM subsidiary called Anderon, which will focus on advanced quantum wafer production.
The market’s ability to hold gains despite the uncertainty of the Iran war negotiations, and persistently high yields suggested investors remain focused on the possibility that easing energy prices could reduce inflation pressures later this summer. Traders Friday will have to decide if they can hold their investments going into the long holiday weekend or if they should take some profits off the table.