Dow Jones slips even as chip stocks offset renewed US-Iran tensions

US stocks opened higher on Thursday as gains in semiconductor shares helped offset renewed geopolitical concerns after fresh exchanges of attacks between the United States and Iran threatened to prolong the conflict and keep investors on edge.

The Dow Jones Industrial Average fell 28 points, or 0.05%, while the S&P 500 gained 0.11%. Nasdaq Composite had a 0.14% advance, supported by strength in chipmakers.

The gains followed a mixed session on Wednesday, when the Dow and S&P 500 closed lower while the Nasdaq posted a modest gain.

Chip stocks lead market rebound

Semiconductor stocks continued their recovery after rebounding in the previous session.

The VanEck Semiconductor ETF (SMH) rose 3.88% in trading, led by a 7.2% gain in Micron Technology, while Sandisk advanced more than 6%.

The iShares Semiconductor ETF (SOXX) also climbed 5.2%, highlighting continued investor interest in the sector despite concerns over the sustainability of the artificial intelligence-driven rally.

Not all technology shares participated in the rebound.

IBM fell 3.4% and Microsoft lost 1.7% after a report said Starbucks had adopted AI technology to reduce its reliance on both companies.

Other software names also declined, with ServiceNow down 2.5% and Adobe losing 1.3%.

Meta Platforms slipped 3.4% after Reuters reported, citing an internal memo, that the company plans to produce an artificial intelligence chip from September.

Geopolitical tensions remain in focus

Markets continued to monitor developments in the Middle East after the US military said it had launched fresh strikes on Iran to keep the Strait of Hormuz open to shipping. Iran responded with attacks on US assets in Kuwait and Bahrain.

President Donald Trump, who had earlier declared that the interim ceasefire was "over," later said he did not expect a return to full-scale war despite the collapse of the truce.

His comments helped ease some market concerns, although investors continued to reassess the geopolitical outlook.

Economic data and global markets

Fresh US economic data showed that initial jobless claims declined last week, indicating the labor market remained stable despite slower job growth in June.

Meanwhile, minutes from the Federal Reserve's June meeting under Chair Kevin Warsh showed policymakers ultimately left interest rates unchanged, although a few officials saw a case for raising borrowing costs before agreeing to hold steady.

According to LSEG data, traders continue to price in at least one 25-basis-point rate hike by the end of the year.

Outside the US, European markets edged higher, with the pan-European Stoxx 600 rising 0.55%.

Asian markets ended mixed. Japan's Nikkei 225 gained 1.4%, South Korea's Kospi added 0.62%, Hong Kong's Hang Seng fell 0.5%, while mainland China's CSI 300 advanced 2.5%.

Among individual stocks, Levi Strauss fell 3.5% despite raising its annual sales forecast, while PepsiCo declined 4.6% even after reporting second-quarter revenue that exceeded analysts' estimates.