U.S. stocks rise 0.8% as Iran war fears ease, oil retreats

The S&P 500 rose 0.81% to 7,543.64 as easing Iran war fears drove oil prices lower and quelled inflation expectations.

The moderation in crude prices caused bond traders to pull back bets on an imminent interest-rate hike, with the yield on the 10-year Treasury note falling 3 basis points to 4.539%.

The Dow Jones Industrial Average added 139 points, or 0.27%, to 52,487.41, while the tech-heavy Nasdaq Composite surged 1.3% to 26,206.89. U.S.-traded oil futures lost $1.44, or 2%, to $72.08 a barrel, retreating from Wednesday's test of the $76 mark when the U.S. and Iran exchanged fire over the Strait of Hormuz. The U.S. pounded Iranian missile and drone sites while Iran fired on Kuwait and Bahrain, which host American military bases. Jordan said its air defenses intercepted eight Iranian missiles.

The oil-price decline reduces a key inflation risk that had threatened to force the Federal Reserve to raise rates, supporting a broader risk-on rotation. Gold futures rose $59.70, or 1.5%, to $4,130.60 a troy ounce — their largest gain since June 15 — as the U.S. Dollar Index ticked lower.

Tech Leads Rebound as Chip Demand Holds

Semiconductor stocks led the recovery after a midweek selloff triggered by Samsung Electronics' disappointing earnings. Broadcom extended gains tied to a new supply agreement with Apple, while SK Hynix's American depositary receipt offering was oversubscribed sevenfold, signaling robust demand for chip exposure despite sector volatility. The Philadelphia Semiconductor Index recouped most of its Wednesday losses as traders rotated back into growth names.

Consumer Stocks Lag as War Impact Hits Earnings

Consumer discretionary names lagged as the conflict's lingering effect on household budgets weighed on results. PepsiCo Chief Executive Ramon Laguarta said the Iran war had a meaningful impact on snack and beverage sales during the latest quarter as consumers cut back on discretionary spending. Shares of PepsiCo fell $4.63, or 3.25%, to $137.86.

In healthcare, AstraZeneca and partner Ionis Pharmaceuticals plunged after their jointly developed Wainua product failed to significantly improve patient outcomes in a late-stage trial for heart disease. AstraZeneca dropped $10.83, or 5.7%, to $178.49.

Existing-home sales rose 2.8% in June from a year earlier to a seasonally adjusted annual rate of 4.09 million, the National Association of Realtors said, offering a bright spot for the housing market amid elevated mortgage rates.

The yield on the two-year Treasury declined 3.9 basis points to 4.162%, reflecting reduced bets on near-term rate hikes. The broader market rally was broad-based, with the S&P 500 recovering all of Wednesday's losses as traders priced in a lower probability of a full-blown conflict disrupting Persian Gulf oil shipments.

The 60-day ceasefire signed between the U.S. and Iran in mid-June remains under strain after President Trump declared it "over" Wednesday while leaving the door open to continued talks. Analysts said the path to lasting peace remained volatile, with traffic through the Strait of Hormuz falling sharply from pre-war levels.

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