Dow jumps 246 points as chip stocks rebound despite Iran tensions

US stocks opened higher on Thursday as investors returned to beaten-down technology shares following a sharp selloff, though gains were tempered by rising geopolitical tensions in the Middle East and higher oil prices.

The Dow Jones Industrial Average added 246 points. The S&P 500 rose 0.29%, while the Nasdaq Composite gained 0.28%.

The rebound came after Wednesday’s steep decline, when major Wall Street indexes fell more than 1% amid another selloff in semiconductor stocks.

The S&P 500 has now fallen about 4% since reaching a record closing high in early June, while technology stocks have entered correction territory after declining 10% from their recent peak.

Chip stocks rebound after sharp selloff

Semiconductor shares led Thursday’s gains. Nvidia, Intel and Micron Technology advanced between 0.62% and 8%, while the iShares Semiconductor ETF climbed about 3%.

Intel received an additional boost after Bank of America upgraded the company to Buy from Underperform.

The brokerage cited growing demand for central processing units and opportunities tied to the rise of agentic artificial intelligence.

The sector's recovery follows a difficult week for chip stocks.

The semiconductor ETF had already suffered a 10% decline on Friday, prompting some investors to question whether the powerful rally fueled by artificial intelligence demand had run its course.

Market participants are also looking ahead to the highly anticipated market debut of SpaceX on Friday.

The company is expected to be valued at roughly $1.75 trillion to $1.8 trillion, making it the largest public debut on record.

Some traders believe recent weakness in semiconductor shares may partly reflect investors raising cash to participate in the offering.

Iran tensions push oil higher

Despite the rebound in equities, geopolitical concerns continued to weigh on sentiment.

West Texas Intermediate crude futures rose nearly 1% to around $90 per barrel after President Donald Trump signaled potential military action against Iran.

Trump said the United States will hit Iran "very hard tonight" and later stated on Truth Social: “At some point in the not too distant future, we will be taking Kharg Island, and other oil infrastructure points, and assume total control of their Oil and Gas Markets.”

The comments followed additional US military action in the region. US Central Command said it launched more "self-defense strikes" against Iran late Wednesday at Trump's direction.

The escalation caused stock futures to trim some of their earlier gains as investors assessed the potential economic consequences of higher energy prices.

Economic data and sector rotation remain in focus

Investors also digested fresh economic data showing producer prices increased more than expected in May.

The producer price index rose 1.1%, above economists' expectations of 0.7%, while core inflation, excluding food and energy, came in at 0.4%.

Separately, new claims for unemployment benefits increased modestly last week.

The Federal Reserve is widely expected to leave interest rates unchanged at its June 17 policy meeting, although markets continue to price in at least one quarter-point rate increase before year-end.

Outside the semiconductor sector, Oracle shares fell 12% after the company unveiled plans to raise an additional $20 billion in equity and debt financing to support artificial intelligence infrastructure investments.

Meanwhile, corporate travel platform Navan surged 11% after raising its full-year revenue and operating income forecasts, citing strong business travel demand and continued growth among enterprise customers.