After getting knocked around for three days, Wall Street decided it was time to get back up on Thursday morning.
The Dow Jones Industrial Average (DJINDICES: ^DJI) climbed 0.7% by noon, while the S&P 500 (SNPINDEX: ^GSPC) added 0.4%. The Nasdaq Composite (NASDAQINDEX: ^IXIC) was up 0.6%, though it had been running as high as 1.3% earlier before losing some steam. A brief scare around 11 a.m., when a false hazmat alarm triggered a Pentagon lockdown, sent all three indexes into a brief dip toward flat for a few minutes. The all-clear came quickly, and so did the buyers.
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Behind Thursday’s modest bounce
Semiconductor stocks led the morning rally after entering correction territory earlier this week.
Chip equipment makers posted particularly strong gains, with Lam Research (NASDAQ: LRCX) up 8.4% and Micron Technology (NASDAQ: MU) rising 3.6%. Analysts have been raising price targets and talking up AI-driven demand. However, these stocks are too small to make a serious difference to any of the leading indexes today, despite their large jumps.
Likewise, Oracle (NYSE: ORCL) barely made a ripple on the S&P 500 index, and isn’t even a member of the Nasdaq and Dow Jones lists. The averages barely noticed the software giant’s beat-and-raise report with a $70 billion next-year budget for capital expenses, which sent the stock as much as 12.9% lower in the morning.
On the other hand, Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is down just 2.2% with no huge news of its own. Yet, it is moving the Nasdaq Composite and S&P 500 indexes more than any other stock today. That’s the index-moving power of a $4.2 trillion market cap.
The morning’s inflation data didn’t help the market mood. The Producer Price Index rose 1.1% in May, hotter than the 0.7% Wall Street expected. Year-over-year, wholesale prices are up 6.5%, the biggest jump in over three years. The culprit is mostly energy, as oil-related costs accounted for about 80% of the increase.
Meanwhile, the U.S.-Iran situation remains fluid. President Trump threatened further military action overnight, and Iran claimed it had closed the Strait of Hormuz. U.S. officials dispute that, and reports suggest diplomatic back channels are still active. It’s hard to tell what’s going on behind the scenes in and around Iran. Oil prices reflected the uncertainty, with West Texas Intermediate up by 0.5%.
