US stocks rose as investors put aside concerns over the latest flare-up between the US and Iran to pile on technology stocks after recent declines spurred dip buying.
The Nasdaq 100 Index gained 1.6% and S&P 500 Index climbed 0.8%, driven by gains in information technology and consumer discretionary.
The optimism comes even as the conflict in the Middle East intensified and the US military struck Iran for a second day, hitting about 90 targets. Investors instead focused on signs that the artificial intelligence investment boom remains intact after a sharp bout of selling in chip stocks earlier this week.
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"Our client conversations do not indicate any meaningful fundamental worries about the AI trade or capex story," Goldman Sachs Group Inc.'s trading desk wrote in a note, adding that clients broadly viewed the recent unwind as largely technical rather than fundamental.
BlackRock Inc.'s Helen Jewell echoed that view, saying commitments to AI spending should continue supporting the investment theme for another two to three years, even as the largest technology companies begin to generate negative free cash flow and increasingly tap debt markets to finance their buildouts. Micron Technology Inc. announced that it was looking to spend more than $250 billion through 2035, accelerating its planned US fab and technology investments.
On the economic front, jobless claims fell 2,000 to 215,000 in July 4 week compared with median estimates of 217,000, the Labor Department data show.
Meta Platforms Inc. shares bounced from an early decline to close 4.7% higher. Reuters reported that the Facebook parent plans to start manufacturing its AI chip in September, citing an internal memo from the company. Separately, Chief Executive Officer Mark Zuckerberg said, he's considering whether some of Meta's AI infrastructure could be more valuable if rented to outsiders.
Consumer companies are in focus. Costco Wholesale Corp. reported a slowdown in June comparable sales from the prior month. PepsiCo Inc. slipped after weak domestic food and beverage trends weighed on second-quarter results. Levi Strauss & Co. shares fluctuated between gains and losses on an underwhelming full-year forecast as earnings beat the average analyst estimate.
Among other individual movers, FedEx Corp. and United Parcel Service Inc. shares initially dropped following a report that Amazon Shipping is making a competitive push, before recovering. Paramount Skydance Corp. shares dropped as Arete Research downgraded the stock to sell from neutral and said management may not have the experience needed to manage the large amount of debt that will come from a merger with Warner Bros. Discovery Inc.
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Salesforce Inc. declined as much as 6.1% after KeyBanc Capital Markets downgraded the software maker to sector weight from overweight. FuelCell Energy Inc. shares jumped after it announced a collaboration with Siemens AG to accelerate deployment of fuel cell-based distributed energy systems. And International Business Machines Corp. shares fell as Starbucks Corp. is developing in-house tools with the help of AI that could replace some software applications it now buys from the company.
In the IPO space, investor appetite for AI-related listings remained robust. SK Hynix Inc.'s US initial public offering was said to be more than seven times oversubscribed ahead of pricing later Thursday.
The company is said to guide US offering price to $149. With the South Korean memory-chip maker's American depositary receipts set to begin trading Friday, investors face the added challenge of valuing the shares without an established history for the premium typically commanded by the US listing.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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