The S&P 500 and other major U.S. indices finished higher on Thursday, aided by gains in semiconductor stocks and a drop in oil prices amid renewed tensions between the U.S. and Iran. The Nasdaq Composite outperformed with a 1.3% rise, boosted by Micron Technology and Sandisk, while the S&P 500 climbed 0.81% and the Dow added 0.27%. Despite ongoing geopolitical uncertainty, global markets saw mixed reactions with European and Asian tech stocks mostly rebounding, reflecting cautious investor optimism.

U.S.-Iran hostilities escalated with fresh American strikes in response to Iranian attacks disrupting shipping in the Strait of Hormuz, a critical oil transit route. Oil prices initially spiked due to supply disruption concerns but retreated later after President Donald Trump indicated Iran had reached out to negotiate a deal, introducing some diplomatic hope. Mediation efforts by Qatar and Pakistan are underway, though volatility is expected to persist as market participants weigh inflation risks and the potential impact of Fed interest rate moves.

On the corporate front, the semiconductor sector attracted strong investor interest, with Micron announcing up to $3 billion in investments to bolster the U.S. chip supply chain. Conversely, Salesforce faced a downgrade from KeyBanc Capital Markets due to doubts about its growth prospects, with its shares declining. Meanwhile, Waters Corporation received a buy rating from RBC Capital Markets following its acquisition of Becton Dickinson’s biosciences units, seen as a strategic move to expand its market position.

Other notable stock movements included PepsiCo’s shares slipping after mixed quarterly results and Levi Strauss falling despite beating earnings expectations, weighed down by cautious guidance. Netflix’s price target was reduced by Citi despite retaining a buy rating, reflecting challenges including tepid viewership and ongoing investor focus shifting towards semiconductor stocks. Analysts signaled that a delay in anticipated AI-driven profits from major tech companies could pose broader risks to market stability and economic growth.