The major averages finished higher as investors rotated back into semiconductor stocks while easing oil prices helped support economically sensitive areas of the market following yesterday's geopolitical-driven selloff. The Nasdaq Composite (+1.3%) led the advance as chipmakers rallied throughout the session, while the S&P 500 (+0.8%) also climbed into the close. The DJIA (+0.3%) posted a more modest gain, reflecting some weakness among several defensive-oriented sectors.

The information technology sector (+1.8%) led the market, supported by a 3.1% gain in the PHLX Semiconductor Index. Nikkei reported that Applied Materials (AMAT 588.66, +18.16, +3.18%) CEO Gary Dickerson said chipmakers are preparing for years of expansion, reinforcing optimism surrounding AI-related capital spending as investors continued buying yesterday's dip.

Memory stocks received an additional boost after Reuters reported that SK Hynix's upcoming U.S. ADS offering is more than seven times oversubscribed, highlighting continued institutional enthusiasm for AI-related semiconductor names. Leadership remained concentrated in memory stocks such as Micron (MU 991.64, +42.84, +4.52%) and Sandisk (SNDK 1857.37, +130.19, +7.54%), semiconductor equipment companies including Lam Research (LRCX 353.17, +20.02, +6.01%), and AI compute and networking names such as Advanced Micro Devices (AMD 546.72, +29.32, +5.67%), suggesting investors continue to favor the highest-conviction AI beneficiaries.

Outside of technology, easing energy prices provided a more supportive backdrop for cyclical sectors. WTI crude oil futures settled down $1.43 (-1.9%) at $72.10 per barrel despite continued exchanges of fire between the U.S. and Iran, helping Treasury yields retreat from yesterday's highs.

The consumer discretionary sector (+1.2%) strengthened into the afternoon, led by cruise operators such as Norwegian Cruise Line (NCLH 19.76, +1.29, +6.98%), while Tesla (TSLA 406.55, +12.49, +3.17%) rebounded sharply from yesterday's weakness.

The industrials sector (+0.4%) also benefited, with trucking companies, including FedEx Freight (FDXF 154.25, +10.95, +7.64%), and airlines contributing to the advance.

The financials (+1.0%) remained among the day's strongest performers as investors continued to buy yesterday's weakness.

Today's retreat in oil prices weighed on the energy sector (-1.6%), while defensive-oriented groups also underperformed amid the renewed appetite for technology stocks. The consumer staples sector (-1.8%) finished as the weakest S&P 500 sector after Costco (COST 912.97, -40.16, -4.21%) declined on softer June comparable sales growth and PepsiCo (PEP 137.86, -4.65, -3.26%) fell despite a narrow earnings beat as its North America results disappointed. The utilities (-0.6%) and health care (-0.1%) sectors also finished lower.

Outside of the S&P 500, the Russell 2000 (+1.2%) and S&P Mid Cap 400 (+1.2%) both rebounded nicely from yesterday's weakness, reflecting a broad improvement in sentiment as oil prices and Treasury yields retreated.

Today's session marked a reversal of several themes that dominated yesterday's trading. While easing oil prices helped broaden participation across portions of the market, semiconductor stocks once again provided the clearest leadership as investors looked past ongoing geopolitical tensions and renewed their focus on the long-term AI investment cycle.

U.S. Treasuries snapped their two-day skid on Thursday, spending the session in a steady bounce off their opening lows. The daylong rally received some intraday support from a strong $22 billion 30-year bond sale, which made for a good finish to this week's trifecta of solid auctions. The 2-year note yield settled down four basis points to 4.16%, and the 10-year note yield settled down three basis points to 4.54%.

• Russell 2000: +20.6% YTD
• S&P Mid Cap 400: +14.4% YTD
• Nasdaq Composite: +12.8% YTD
• S&P 500: +10.2% YTD
• DJIA: +9.2% YTD

Reviewing today's data:

• Weekly Initial Claims 215K (Briefing.com consensus 220K); Prior was revised to 217K from 215K, Weekly Continuing Claims 1.814 mln; Prior was revised to 1.806 mln from 1.814 mln
  • The key takeaway from the report is the same key takeaway as other recent reports: the low level of initial jobless claims continues to reinforce the understanding that layoff activity remains quite low overall.
• June Existing Home Sales 4.09 mln (Briefing.com consensus 4.20 mln); Prior was revised to 4.19 mln from 4.17 mln
  • The key takeaway from the report is that affordability conditions improved across all regions as wage growth outpaced home price growth; however, overall sales were still pressured by high prices and elevated mortgage rates.