US stocks moved higher on Thursday as investors bought back into chip stocks after recent losses. Gains stayed limited as fresh comments from President Donald Trump raised concern over a wider US-Iran conflict.

The S&P 500 gained about 0.4%, while the NASDAQ Composite added 0.6%. The Dow Jones Industrial Average rose 270 points, or 0.5%. Earlier moves were smaller, with the S&P 500 nearly flat as traders weighed rising Middle East tensions, oil prices, inflation data, and the rebound in semiconductor shares.

Chip Stocks Lead Market Rebound

Chip stocks helped lift the broader market after a sharp selloff earlier in the week. Micron Technology, Advanced Micro Devices, NVIDIA, and Intel moved higher as investors returned to beaten-down technology names. The iShares Semiconductor ETF gained about 3%, while the Philadelphia Semiconductor Index rose more than 4% during morning trading.

Intel posted one of the strongest moves in the sector after Bank of America upgraded the stock from underperform to buy. The firm also raised its price target to $135 from $96. Intel shares rose between 5% and 10% following the upgrade, with analysts pointing to stronger confidence in server CPU demand and advanced packaging opportunities.

The rebound came after chip stocks faced heavy pressure in recent sessions. The semiconductor ETF had fallen sharply last Friday, raising questions about whether the strong rally in artificial intelligence-linked stocks had become stretched. However, Thursday’s buying showed that investors were still willing to enter the sector after pullbacks.

Trump Iran Warning Keeps Markets Cautious

Market gains were capped after Trump issued a fresh warning on Iran. In a post on Truth Social, he said the US would be attacking Iran ‘VERY HARD TONIGHT.’ He also said the US would soon take Kharg Island and other oil infrastructure points, while seeking “total control” of Iran’s oil and gas markets.

The comments followed fresh US Central Command strikes against Iran late Wednesday. Centcom said the actions were ‘self-defense strikes’ and were carried out at Trump’s direction. The latest moves marked another escalation in the conflict and kept investors focused on oil markets and inflation risks.

Crude prices moved unevenly after the comments. West Texas Intermediate crude traded near $89 to $90 a barrel, while Brent crude was near $93. Oil had risen earlier in the day after Trump’s warning, though prices later moved close to the flatline as traders assessed whether supply would face direct disruption.

Oracle Falls as AI Spending Worries Grow

Oracle shares dropped around 11% to 12.5% after the company’s update raised fresh concern about the cost of artificial intelligence expansion. The software and cloud company announced plans to raise an additional $20 billion in equity and debt to support its AI buildout.

The decline came even as some reports said Oracle’s earnings beat expectations. Investors focused instead on cloud sales and higher capital spending plans tied to data centers. The stock’s weakness weighed on software shares, while other names in the group also fell.

Still, broader market breadth was positive. Ten of the 11 major S&P 500 sectors traded higher, with industrial shares leading gains. Communication services was the main weak spot, as Alphabet and Meta each fell nearly 2%.

Inflation Data Adds Pressure Before Fed Meeting

Economic data added another layer of caution. The producer price index rose 1.1% in May, above the 0.7% increase expected by economists polled by Dow Jones. On an annual basis, producer prices rose 6.5%, marking the largest yearly increase in more than three years.

Core producer inflation, which excludes food and energy, rose 0.4%. That was below the 0.5% forecast. Still, the stronger headline reading kept attention on the risk that higher energy costs from the Middle East conflict could feed into business costs.

Separately, initial jobless claims rose to 229,000 for the week ended June 6. That was above expectations of 220,000. Continuing claims also increased to 1.795 million, pointing to some cooling in the labor market.

The Federal Reserve is widely expected to hold interest rates steady at next week’s policy meeting. However, traders are now pricing in at least one 25-basis-point rate hike by the end of the year, as inflation pressure and energy risks return to focus.

Meanwhile, the World Bank lowered its global growth outlook due to the Middle East war and higher energy prices. It expects global growth to slow to 2.5% this year from 2.9% in 2025. The bank also warned that growth could weaken further if energy supply disruptions worsen and financial markets face added stress.

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