Stock Market Rally Caps Week as Iran Peace Deal and Tech Gains Overcome Fed Rate Concerns

US equity markets closed Thursday with substantial gains, driven primarily by technology sector strength and optimism surrounding a newly signed US-Iran peace agreement that reduced immediate geopolitical risk. The S&P 500 advanced 1.1% to 7,500.58 points, while the tech-heavy Nasdaq Composite surged nearly 2% to 26,517.93 points, though the Dow Jones Industrial Average lagged with a 0.1% gain at 51,564.70. All three major indexes recorded weekly gains heading into Friday's market closure for the Juneteenth holiday.

Geopolitical Relief Powers Market Sentiment

The signing of a preliminary US-Iran peace memo on Wednesday shifted investor sentiment away from conflict-driven uncertainty. The agreement reopened the Strait of Hormuz to commercial shipping traffic and removed a US naval blockade in the region, immediately reducing supply chain concerns in one of the world's most critical energy corridors. Negotiations on longer-term issues, including Iran's nuclear program, are scheduled for the next 60 days.

Oil prices responded to the announcement by retreating from recent highs. Brent crude, the international benchmark, hovered near $79 per barrel on Thursday, while West Texas Intermediate remained above $75 per barrel. These levels represent a significant pullback from prices exceeding $100 per barrel in recent weeks, providing relief to sectors sensitive to energy cost pressures. Airlines and cruise operators, including American Airlines (up 3.7%), United Airlines (up 2.1%), and Carnival (up 3.2%), posted among the day's larger gains.

Tech Leadership Amid Rate Uncertainty

Technology companies dominated the market's upward movement despite Federal Reserve officials signaling that interest rate increases remain on the table for later in the year. The central bank held rates steady on Wednesday but adopted a hawkish stance driven by persistent inflation concerns and a resilient job market. Initial jobless claims data released Thursday came in slightly hotter than expectations, though claims cooled from the prior week.

Semiconductor stocks led the technology rally. Intel surged 10.6% following an announcement that President Trump stated the company will manufacture chips for Apple domestically. Nvidia gained 3%, and Micron Technology jumped 8.7%. By contrast, SpaceX, the rocket and AI company that debuted on US markets last week, fell 3.6% on Thursday, extending Wednesday's 4.9% decline. Energy sector stocks underperformed, with Exxon Mobil down 2.1% and Chevron down 2.2%, as lower crude prices pressured industry valuations.