Stock market today: Dow, S&P 500, Nasdaq rally as Iran deal optimism offsets Fed hike worries

Stocks rallied on Thursday as optimism over a deal between the US and Iran pushed oil prices lower and helped offset concerns about a possible rate hike later this year.

The tech-heavy Nasdaq Composite (^IXIC) rose 1.9%, while the S&P 500 (^GSPC) gained more than 1%. The Dow Jones Industrial Average (^DJI) moved up 0.3%.

Chip stocks surged on Thursday as investors went risk-on and the AI traded marched forward. Intel (INTC) shares led the surge higher after President Trump posted that iPhone and laptop maker Apple (AAPL) has agreed to work with the chipmaker to build its processors.

Investors digested the Federal Reserve’s decision to hold rates steady on Thursday, with policy makers abandoning a dovish bias amid hot inflation.

The stock market will be closed Friday for the Juneteenth holiday.

Yahoo Finance’s Ben Werschkul reports:

President Trump is defending his controversial peace deal with Iran by pointing to the positive reaction from a stakeholder he often values most: the markets.

Within seconds of signing the deal Wednesday at the Palace of Versailles, Trump said that “oil is down” and appeared to add that stocks are up, according to a video distributed by the White House.

Trump reiterated the point on Truth Social as he flew home as part of his weeklong focus on markets, writing that “the Stock Market Just Hit A RECORD HIGH, and Oil prices are ‘tumbling’ down” as he touted the deal.

And the president does have evidence to back up his point, with crude oil prices now below $80 per barrel and average US gas prices below $4 per gallon after dropping over $0.50 in the past month.

Read more here.

Chip stocks surged on Thursday as this year’s market leaders returned to the forefront.

Intel (INTC) shares surged 11% after President Trump posted on Truth Social that iPhone maker Apple (AAPL) has agreed to work with the chipmaker to build its processors.

Micron (MU), Applied Materials (AMAT), and Marvell Technology (MRVL) all jumped to new all time highs.

The Federal Reserve’s decision to hold rates steady did little to cool the year’s hottest trade, which re-accelerated on Friday. Market leadership has remained narrowly concentrated in a handful of high-demand “bottleneck” names.

SpaceX (SPCX) stock tumbled for a second day in a row on Thursday, dropping as much as 10% before trimming losses.

The stock extended losses after breaking a three-day winning streak in the prior session, when broader markets declined following the Federal Reserve’s decision to leave interest rates unchanged.

While the major indexes rebounded on Thursday, SpaceX continued to slide.

Read more here.

Yahoo Finance’s Dan Howley reports:

Anthropic (ANTH.PVT) met with members of the Trump administration this week, as the AI lab seeks to reach an agreement that will allow it to begin using its Fable 5 and Mythos 5 models again.

The administration issued an export control directive against the models last Friday, preventing Anthropic from allowing any foreign national, inside or outside the US, to access the software. And that includes Anthropic employees.

Not being able to show off its latest and greatest models puts the company in a tough spot as it prepares for its initial public offering later this year. But the administration’s approach could pose problems for more than just Anthropic.

Read more here.

The semiconductor trade picked backed up on Thursday, as a rally in the Philly Semiconductor Index (SOX=F) saw a basket of chip names surge to all-time highs.

Major American chip leaders Intel (INTC), Micron (MU), Applied Materials (AMAT), and Marvell Technology (MRVL) all rallied by more than 6% to set new record highs, per data from Bloomberg.

Foreign names Taiwan Semiconductor Manufacturing Company (TSM), Arm Holdings (ARM), and ASML Holding (ASML) all advanced similarly to fresh highs.

And Intel popped by 10% on Thursday after President Trump posted on Truth Social that Apple (AAPL) has agreed to work with the chipmaker to build its processors.

Trump’s statement follows an earlier Wall Street Journal that the two companies had reached a preliminary agreement under which Intel would manufacture chips for the iPhone maker.

The US dollar rallied again on Thursday against a basket of international currencies, extending a sharp rally that began with the Federal Reserve’s hawkish turn on Wednesday.

The dollar gained against the euro, the pound, and the Japanese yen on Thursday, as the dollar index advanced by roughly 0.5%.

The market had largely priced in the Fed’s decision on Wednesday to hold the US target lending rate. But nine of 18 members of the FOMC who submitted economic projections indicated they see a rate hike within 2026, signaling a deeply hawkish redirection at the central bank.

Traders had backed off bets of a rate hike as peace negotiations between the US and Iran continued, but the FOMC’s projections reignited those bets, with one quarter-point in 2026 now fully priced in, per Bloomberg data.

Currencies are driven in large part by interest rate expectations. If the Fed is signaling rates may be higher in 2026 than investors previously thought, that makes dollar-denominated assets more attractive, leading demand for dollars to rise.

Tech led a swing in US stocks into the green on Thursday as investors digested news of a US-Iran deal signing in France and the Fed’s hawkish tilt toward rate hikes.

The tech-heavy Nasdaq Composite (^IXIC) led gains to pick up 1%, while the S&P 500 (^GSPC) gained 0.9%. The Dow Jones Industrial Average (^DJI) moved up 0.7%.

Oil prices sank on Thursday after President Trump and his Iranian counterpart on Wednesday signed a memorandum of understanding overnight, accelerating the previously planned Friday timing. Brent crude futures (BZ=F) fell to trade just barely above $78 per barrel, while US WTI crude (CL=F) held at $74.

Labor Department data released on Thursday showed initial jobless claims cooled week-on-week, in a positive sign for the labor market. In another item of positive news for Americans, the national average gasoline pump prices fell $4 per gallon, per AAA.

Initial jobless claims fell 4,000 to 226,000 in the week ended June 13, according to data released by the Department of Labor on Thursday. That was slightly above expectations but a cooling from the previous week.

New claims for unemployment benefits were expected to be marginally lower at 225,000, per Bloomberg consensus estimates. Last week’s tally was revised to 230,000.

The four-week moving average of initial claims rose to 223,250 from 219,250 the week prior.

Continuing claims, which track the unemployed population still seeking work, rose to 1.810 million in the week ended June 6, from the prior week’s revised count of 1.786 million.

Economists had been looking for 1.789 million continuing claims.

The 2020 playbook is back on Wall Street, but with a different cast, writes Yahoo Finance’s Jared Blikre in today’s Chart of the Day.

He writes:

Flows into thematic ETFs — funds built around big investing ideas like space, nuclear power, quantum computing, robotics, and crypto infrastructure — are surging in a way Strategas ETF Research compares to the ARK-era boom.

“The environment and leadership are different, but flows to Thematic ETFs are accelerating akin to 2020,” Strategas ETF Research’s Todd Sohn wrote in a recent note.

There are a few critical differences.

The last boom was led by stay-at-home stocks, profitless tech, and Cathie Wood’s ARK complex. This one is being pulled toward harder-tech trades, where the story is less about apps and software and more about rockets, reactors, chips, computing power, and energy demand.

SpaceX (SPCX) is the spark.

Read more here.

The Bank of England voted to hold its benchmark lending rate unchanged at 3.75% in a split 7-2 vote, citing potential easing in Iran war price pressures and a weakened UK labor market.

“The risk of material second-round effects in price and wage-setting, against which policy needs to lean, is greater the longer higher energy prices persist,” the Monetary Policy Committee wrote in a statement. “But the labor market continues to loosen, and signs of a weakening economy could contain inflationary pressures.”

The UK central bank’s decision comes after similar rate holds from the Federal Reserve on Wednesday and the Reserve Bank of Australia on Tuesday. The European Central Bank last week and Bank of Japan on Tuesday both issued quarter-point rate hikes, looking to curb inflation stoked by the Middle East conflict.

Echoing the Federal Reserve’s Kevin Warsh, the BOE’s Monetary Policy Committee stated Thursday that “monetary policy cannot affect global energy prices.” It als said: “Our job is to make sure that higher inflation does not persist and have long-lasting effects on the economy.”

Warsh, in his first press conference as Fed chairman on Wednesday, said the central bank “cannot have a very significant effect on particular prices.” Instead, it’s the Fed’s job to “make sure that those changes in oil or beef or eggs or milk don’t broaden in the economy,”

Shares in Intel (INTC) jumped before the bell after President Trump said Apple (AAPL) has agreed to partner with the company to design and make chips in the US.

Intel stock was up 9% at last check, poised to notch a new record high if the move holds in regular trading.

“I decided to help Intel because we need to design and build our Chips right here in America,” Trump said in a post to Truth Social.

Reuters reports:

An Apple contract ​gives ​Intel a steady demand from one ​of the world’s largest consumer ‌electronics companies, boosting both its reputation and a manufacturing business that has lagged TSMC in recent years.

Earlier this week, Intel said a new generation of its manufacturing tech 18A has entered its initial production, as the chipmaker sees strong demand for its central processors.

Last year, the Trump ‌administration took a 10% stake in Intel ​and announced plans to invest roughly $10 billion ​in the chipmaker to build ​or expand U.S. factories.

Read more here.

Reuters reports:

Shares surged Thursday in Asia, with benchmarks in Japan and South Korea setting fresh records, after the U.S. and Iran signed their initial agreement ending the war.

The rally in Asia followed a retreat Wednesday on Wall Street driven by speculation the Federal Reserve may raise interest rates this year to curb inflation.

In Tokyo, the Nikkei 225 (^N225) kept on surging, gaining 1.9% to 71,233.35. It topped 70,000 for the first time this week and is still gaining thanks to hopes for an end to the war and buying of high-tech shares due to the artificial intelligence boom.

South Korea’s Kospi (^KS11) likewise has been setting records, gaining 0.6% to 8,917.31. Taiwan’s Taiex jumped 1%.

In Hong Kong, the Hang Seng (^HSI) lost 1.4% to 23,968.66, while the Shanghai Composite index edged 0.1% higher.

Australia’s S&P/ASX 200 (^AXJO) slipped 0.4% to 8,930.50.

Read more here.

Bloomberg reports:

Gold (GC=F) rose, supported by the signing of an interim peace deal between the US and Iran, even as the Federal Reserve signaled a rate hike later in the year.

Bullion advanced as much as 1.7% to $4,328 an ounce, erasing the drop in the previous session. US and Iranian officials signed the peace agreement electronically on Wednesday evening but it was unclear if the Strait of Hormuz had yet reopened.

The Fed kept interest rates unchanged on Wednesday, saying it would deliver price stability, and removed a reference in its statement to additional rate adjustments. Traders are now fully pricing in a tightening of monetary policy by October. Higher interest rates are a headwind for precious metals, which don’t pay interest.

Spot gold rose 1.6% to $4,322.83 an ounce as of 9:21 a.m. Singapore time. Silver gained 2.5% to $69.61, after falling 3% in the previous session. Platinum and palladium climbed. The Bloomberg Dollar Spot Index was down 0.2%, after gaining 0.7% in the previous session.

Read more here.