Dow surges 930 points to reclaim 50,000 as Trump calls off Iran strikes

The S&P 500 jumped 1.8% to 7,394, and the Nasdaq Composite surged 2.5% to 25,810 after Trump said he called off "scheduled strikes and bombings against Iran."

"The de-escalation removes a tail risk that had been pricing into markets all week," said Emily Roland, co-chief investment strategist at Manulife John Hancock Investment Management. "We woke up this morning to a dip buyer's dream."

The rally was broad-based, with all 11 S&P 500 sectors finishing higher. Technology led as the PHLX Semiconductor Sector index surged 8%, recovering losses from earlier in the week. Nvidia, Advanced Micro Devices and Marvell Technology each gained between 7.5% and 12%, while Super Micro Computer advanced 9%. Oracle was the exception, falling 8.5% after projecting capital spending above estimates. The 10-year Treasury yield fell 9 basis points to 4.47%, and the dollar index slipped 0.3% to 99.67. West Texas Intermediate crude dropped 4.4% to $86.60 a barrel, while gold rose 2.4% to $4,230 an ounce.

The reversal came after three consecutive sessions of losses that had pushed the technology sector into correction territory, fueled by inflation concerns and the escalating U.S.-Iran conflict. The Producer Price Index rose 1.1% month over month in May, above the 0.7% consensus, though core PPI came in below estimates. The Federal Reserve's rate-setting committee meets next week, and the European Central Bank became the first major central bank to raise rates in response to energy-driven inflation. Investors now turn to Friday's market debut of SpaceX, which is expected to list on the Nasdaq at a valuation near $1.8 trillion.

The Dow Jones Industrial Average added 930 points to close at 50,848, reclaiming the 50,000 threshold for the first time since the conflict with Iran escalated. The VIX, Wall Street's fear gauge, fell 12.5% to 19.44, retreating from the 22-handle touched earlier in the week as traders reassessed geopolitical risk.

Chip stocks led the rebound after a volatile week fueled by skittishness about the AI trade. Intel received a rare double upgrade from Bank of America to buy from underperform, with analysts raising their price target to a Street-high $135 from $96, citing growing confidence in its foundry business. Intel shares rose 4%.

The ECB's rate increase and the hotter-than-expected producer price data served as reminders that the energy shock from the Middle East continues to feed through to inflation. The Fed's preferred inflation gauge, the core PCE price index, is expected to have risen in May, keeping pressure on policymakers.

This article is for informational purposes only and does not constitute investment advice.