Dow ends higher as chip stocks rally and Fed rate-hike fears ease

US stocks rebounded on Thursday, with semiconductor shares leading the advance as investors looked past the previous session's Federal Reserve-driven selloff and welcomed easing oil prices and encouraging economic data.

The Dow Jones Industrial Average added 72.15 points, or 0.14%, to end at 51,564.70.

The S&P 500 rose 1.08% to close at 7,500.58, while the Nasdaq Composite climbed 1.91% to 26,517.93.

Semiconductor stocks power market rebound

Chipmakers led Thursday's gains after President Donald Trump said Apple had agreed to work with Intel on designing and manufacturing chips in the United States.

Intel shares surged 10.6%, while Nvidia gained nearly 3% and Micron Technology advanced almost 9%.

The iShares Semiconductor ETF (SOXX) jumped more than 6%, helping drive broader market gains.

The Philadelphia Semiconductor Index significantly outperformed the broader market as investors continued to favor companies tied to artificial intelligence infrastructure and computing demand.

Investors assess hawkish Federal Reserve outlook

The rebound followed a sharp selloff on Wednesday after the Federal Reserve's first policy meeting under Chair Kevin Warsh raised concerns about the outlook for interest rates.

The Fed's latest "dot plot" showed that nine of 18 policymakers now expect interest rates to rise in 2026.

Warsh also abstained from submitting his own interest-rate forecast and repeatedly emphasized the importance of achieving price stability during his press conference.

Markets continued to price in the possibility of additional policy tightening.

According to CME Group's FedWatch tool, traders were assigning roughly a 50% probability to a 25-basis-point rate increase as soon as September and around a 20% probability of a 50-basis-point increase.

Falling oil prices and economic data support sentiment

Investor sentiment was further boosted by developments in the Middle East.

Oil prices slid to their lowest levels since early March after the United States and Iran signed an interim agreement extending the April ceasefire by another 60 days to allow additional time for negotiations.

Although President Donald Trump warned that military action could resume if Iran failed to comply with the agreement, shipping traffic through the Strait of Hormuz began resuming after the United States and Iran extended their interim ceasefire, easing disruptions to the transport of oil, natural gas, fertilizer and other cargoes.

Economic data provided additional support. Labor Department figures showed that weekly jobless claims declined, indicating layoffs remained subdued.

Among individual movers, Accenture fell after trimming the upper end of its annual revenue forecast, dragging peers including Cognizant Technology Solutions, Gartner, and IBM lower.

Kroger also declined after reporting lower-than-expected first-quarter profit and maintaining its annual outlook.

Shares of Elon Musk's SpaceX fell for a second consecutive session after rallying strongly following last week's market debut.

Thursday also marked "triple witching," the quarterly expiration of stock options, index options and futures contracts, an event that can increase trading volumes and market volatility.