US stocks soared to their best day since April, halting a two-day slide, as President Donald Trump said he’s called off planned military strikes on Iran, hours after threatening to escalate the three-month war.
The S&P 500 Index soared about 1.8%, after the president said the signing · of an agreement with Iran could take place as soon as this weekend. The tech-heavy Nasdaq 100 Index advanced 3.3%, its largest gain since March. The Philadelphia Semiconductor Index, home to chip bellwethers such as Nvidia Corp. and Advanced Micro Devices Inc., rallied 7.9% — its best day since April 2025.
Eight of the 11 S&P 500 sectors rose, led by industrials and materials, while energy fell the most as oil prices sank. A basket of the so-called Magnificent Seven companies rose 1.1% , driven by gains in Tesla Inc. and Nvidia. Chevron Corp. and Exxon Mobil Corp. gave up early gains to trade lower.
Traders are getting excited about a cancelled airstrike, and now a “great settlement”, but it is not yet a signed treaty, wrote Dave Mazza, chief executive officer of Roundhill Financial. “There’s material upside left if a deal is actually signed because oil and volatility are still pricing meaningful conflict risk. If it doesn’t, today’s gains were borrowed, and the market will want them back with interest since we’ve seen this before.”
Among individual shares, Intel Corp. rose 9.3% after BofA Global Research raised its recommendation to buy from underperform on expected growth from central-processing-unit sales. Oracle — among the biggest S&P 500 decliners — dropped 8.5% after the company reported quarterly capital expenses that were higher than estimates.
Major US indexes were weighed down earlier as a report showed the producer price index for May increased 6.5% from a year earlier, the most since 2022. The data showed the fallout from the Iran war continued to fan inflation pressures, sustaining speculation the Federal Reserve’s next move will be to raise interest rates.
A strong reading on the US labor market last week helped soothe concerns about slowing growth, though at the same time it renewed worries about high prices.
Concern about sticky inflation and the pressure on the Fed to contain it briefly pushed the Cboe Volatility Index, or VIX, above 20, a level that signals concern among traders, before falling below 20. With Elon Musk’s SpaceX expected to go public on Friday, the prospect of another trillion-dollar-plus company hitting the market may be forcing investors to reposition portfolios at the cost of their tech stocks, analysts say.
Shares in rocket, satellite and space-linked companies including Redwire Corp. and Firefly Aerospace Inc. advanced 15% and 18%, respectively, before the much-anticipated SpaceX initial public offering.