NEW YORK: Wall Street’s main indexes gained on Thursday, as a Micron Technology-led rally in chip stocks outweighed concerns that renewed US and Iranian attacks would prolong the conflict and stoke broader geopolitical risks.
Iran said on Thursday it had hit US military targets in Kuwait, Qatar and Bahrain, following Wednesday’s US strikes, further straining fragile ceasefire efforts.
The Philadelphia SE Semiconductor index gained 4.6 percent in morning trading to be on track for a second straight positive session.
Micron Technology jumped 7.5 percent after laying out plans to invest more than USD250 billion in the United States through 2035, to benefit from an AI-fueled surge in demand for memory chips.
Applied Materials gained 7 percent and On Semiconductor leaped 9.3 percent. The information technology sector advanced 1.5 percent, leading gains on the benchmark S&P 500 index.
Conversely, Meta Platforms fell 1 percent after Reuters reported that the company plans to start making AI chips from September. The decline dragged down the communications services index and capped gains on S&P 500.
Sentiment towards AI-linked stocks has been volatile lately amid concerns about the sustainability of a rally that has helped Wall Street reach record levels in 2026, despite simmering Middle East tensions.
“The rebound in chip stocks is likely sustainable, even though the sector may have risen too far, too fast and could see some short-term digestion of gains,” said Sam Stovall, chief investment strategist, CFRA Research.
“My concern is not necessarily with semiconductors in particular or tech in general, but with the other areas of the market; because, with tensions in Iran resuming, it’s very uncertain as to what kind of an impact that would have on inflationary projections.”
IBM and Microsoft fell 2 percent and 0.8 percent, respectively. Bloomberg reported Starbucks had tapped AI to reduce its reliance on both companies.
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