Nasdaq jumps as chip stocks lift Wall Street despite Iran concerns

U.S. stocks finished higher Thursday, with the Nasdaq composite leading Wall Street as a rally in chipmakers and artificial intelligence-related shares helped offset investor concerns about the U.S.-Iran conflict.

The technology-heavy index closed sharply higher, extending gains as traders continued to favor companies tied to semiconductor demand and AI infrastructure. The S&P 500 also advanced, while the Dow Jones Industrial Average posted a more modest gain as investors weighed strength in growth stocks against geopolitical uncertainty.

The session underscored the market’s continued focus on large technology and chip companies, which have been among the strongest drivers of U.S. equity performance. Optimism around AI spending, data center buildouts and demand for advanced processors helped pull major indexes upward even as headlines from the Middle East kept risk appetite in check.

Chip rally steadies broader market

Semiconductor shares were at the center of Thursday’s advance. Investors have increasingly treated chipmakers as a key gauge for the broader technology trade, given their role in powering AI models, cloud computing systems and high-performance servers.

Gains in the sector helped blunt worries that escalating tensions between the United States and Iran could disrupt energy markets or dent confidence. While geopolitical risks remained a factor, the stock market’s reaction suggested many investors were not yet pricing in a prolonged shock to corporate earnings or global growth.

Oil prices pulled back during the session, easing some pressure that had built after reports of fresh strikes and continued fighting. A decline in Treasury yields also supported equities, particularly growth-oriented technology shares, which tend to benefit when borrowing costs and discount rates move lower.

Investors watch oil, yields and earnings outlook

Market participants continued to monitor whether the conflict could affect shipping routes, crude supplies or inflation expectations. A sustained jump in oil prices could complicate the outlook for consumers and businesses, while also influencing Federal Reserve policy expectations.

For now, Thursday’s trading showed that investors remained willing to buy into technology strength. The advance also reflected confidence that AI-related capital spending can continue to support revenue growth for chip companies and the broader tech supply chain.

Still, analysts cautioned that the market remains sensitive to sudden shifts in geopolitics, oil prices and interest rates. With major indexes near elevated levels, any sign of weakening demand, rising inflation pressure or a broader regional conflict could quickly test the rally.

The day’s gains added to a familiar pattern on Wall Street: technology leadership continuing to outweigh near-term concerns elsewhere in the market. Whether that momentum holds may depend on upcoming corporate results, guidance from chip and cloud companies, and further developments in the Middle East.