The major averages finished mixed as renewed hostilities between the U.S. and Iran sent oil prices sharply higher, pressuring much of the market while an afternoon rebound in semiconductor stocks helped offset some of the weakness. The S&P 500 (-0.3%) closed modestly lower, while the DJIA (-1.1%) lagged amid broad cyclical weakness. The Nasdaq Composite (+0.2%) bucked the trend, climbing back into positive territory as strength across large-cap technology stocks softened the impact of the oil-driven selloff.

The U.S. struck Iranian targets in response to attacks on commercial ships in the Strait of Hormuz, prompting President Trump to declare the ceasefire effectively over and threaten additional strikes. Crude oil futures settled $3.05 higher (+4.3%) at $73.53 per barrel after being up more than 6% earlier in the session.

The surge in oil prices pressured much of the market outside of energy and technology. The materials sector (-2.5%) posted the steepest decline, with packaging companies such as Smurfit Westrock plc (SW 42.08, -2.92, -6.49%) moving lower as higher energy costs threatened margins. Sherwin-Williams (SHW 330.57, -11.69, -3.42%) was also a notable laggard, contributing to the DJIA's underperformance.

The consumer discretionary sector (-1.6%) followed close behind as travel-related stocks, couriers, and homebuilders retreated amid the surge in oil prices and Treasury yields. The iShares U.S. Home Construction ETF retreated 4.0%.

The financials (-1.9%), communication services (-1.4%), and rate-sensitive real estate (-1.6%) sectors also underperformed, while the consumer staples sector (-0.3%) held up relatively well.

Unsurprisingly, the energy sector (+1.5%) finished atop the leaderboard, though it pared stronger gains from earlier in the session after President Trump said any developments involving Iran would be resolved quickly, including any impact on oil prices, and reiterated that he does not expect the conflict to restart.

The information technology sector (+1.4%) provided an important counterweight as semiconductor stocks strengthened into the close. The PHLX Semiconductor Index climbed 2.2%, helping the market-weighted S&P 500 (-0.3%) considerably outperform the S&P 500 Equal Weight Index (-1.2%).

NVIDIA (NVDA 204.08, +7.15, +3.63%) outperformed after reports that China will allow limited H200 chip purchases for select AI firms, while Broadcom (AVGO 388.69, +17.91, +4.83%) advanced after Apple (AAPL 313.28, +2.62, +0.84%) expanded its multiyear U.S. supply agreement for wireless-connectivity components and custom silicon. Akamai Tech (AKAM 126.57, +12.20, +10.67%) was the top-performing S&P 500 stock after being selected as a strategic security partner for World Wide Technology's AI infrastructure initiative, reinforcing its expanding role in enterprise AI security deployments.

On the policy front, investors also digested the June FOMC minutes, which reinforced the Fed's data-dependent approach while acknowledging persistent inflation pressures and uncertainty tied to geopolitical developments. Participants continued to emphasize that future policy decisions will depend on incoming economic data, while noting that markets have shifted toward expecting fewer rate cuts over the coming year.

Although the surge in oil prices weighed broadly on equities, today's action ultimately did little to alter the market's recent leadership trends. Buy-the-dip interest emerged across semiconductor stocks following yesterday's sharp retreat, while favorable corporate developments involving NVIDIA and Broadcom helped cushion the major indices even as higher oil prices continued to pressure much of the broader market.

U.S. Treasuries faced another round of selling on Wednesday, which drove yields on 5-year note and shorter tenors back to their highest settlement levels of the year while yields on 10-year and 30-year remained below their May highs. The U.S. Treasury followed yesterday's good 3-year note offering with another solid 10-year note reopening ahead of tomorrow's 30-year bond reopening. The 2-year note yield settled up four basis points to 4.20%, and the 10-year note yield settled up four basis points to 4.57%. 

• Russell 2000: +19.1%
• S&P Mid Cap 400: +13.0%
• Nasdaq Composite: +11.3%
• S&P 500: +9.3%
• DJIA: +8.9%

Reviewing today's data:

• Weekly MBA Mortgage Applications Index -2.2%; Prior 0.0%
• May Wholesale Inventories 0.1% (Briefing.com consensus 0.3%); Prior 0.6%
• Consumer credit decreased by $200 mln in May (Briefing.com consensus $18.9 bln) after increasing by a revised $20.8 bln (from $20.7 bln) in April. Revolving credit decreased by $5.3 bln while nonrevolving credit increased by $5.1 bln.