U.S. stocks moved higher on Thursday as investors welcomed renewed optimism surrounding a potential diplomatic breakthrough between the U.S. and Iran, while strong tech earnings fueled momentum across the AI trade. The rebound helped major indexes recover from earlier weakness tied to ongoing geopolitical tensions near the Strait of Hormuz.
The tech-heavy Nasdaq Composite climbed roughly 0.7%, powered by outsized gains in cloud computing, AI infrastructure, and semiconductor-linked names. The S&P 500 added about 0.5%, while the Dow Jones Industrial Average hovered near the flat line as investors balanced easing energy concerns against fresh inflation and labor market data.
Market Movers:
- Snowflake (+36%) – Shares surged after the cloud software company reported stronger-than-expected quarterly earnings and unveiled a massive multiyear partnership expansion with Amazon Web Services valued at $6 billion. Management said AI-driven demand fueled the strongest sequential product revenue growth in company history, helping restore confidence in enterprise AI spending trends.
- Unusual Machines (+33%) – The drone technology company rallied sharply after reports suggested the Trump administration is considering funding agreements with domestic drone manufacturers as part of a broader defense and industrial policy initiative. Investors rotated aggressively into defense-tech and autonomous systems names amid expectations for increased government spending.
- Kohl's (+24%) – Shares jumped after the retailer posted a smaller-than-expected quarterly loss and reaffirmed its full-year guidance. Investors also welcomed improving inventory management and signs that operational restructuring efforts may be stabilizing the business.
- Dollar Tree (+12%) – The discount retailer climbed after reporting stronger-than-expected fiscal first-quarter earnings and raising its forward outlook. Higher transaction values and resilient consumer demand helped offset softer foot traffic as shoppers continue seeking value-focused retailers.
- Phreesia (+13%) – Shares moved higher after the healthcare software provider posted an unexpected profit and delivered better-than-expected revenue growth. Payment solutions revenue surged during the quarter, extending the company’s streak of positive earnings momentum.
- Photronics (-32%) – The semiconductor photomask maker plunged after disappointing quarterly earnings missed Wall Street expectations on both revenue and profit. Weakness in memory-related demand and softer high-end integrated circuit sales pressured investor sentiment.
- ATS Corporation (-12%) – Shares fell after the industrial automation company issued weaker-than-expected forward revenue guidance. Investors focused on slowing order growth and operational restructuring headwinds despite solid fourth-quarter results.
- Braze (-7%) – The customer engagement software firm declined despite posting strong revenue growth and raising its full-year outlook. Investors appeared concerned about margin pressure and near-term scaling constraints tied to its AI expansion efforts.
AI Earnings Continue Driving Tech Leadership
Technology stocks remained the market’s key leader as investors digested another round of AI-driven earnings results. Strong reports from companies tied to cloud infrastructure, semiconductors, enterprise software, and data analytics reinforced the narrative that artificial intelligence spending remains robust despite broader macroeconomic uncertainty.
Beyond Snowflake’s breakout quarter, earnings from companies including Marvell Technology and HP also pointed to continued enterprise investment in AI infrastructure, data centers, and next-generation computing systems. The rally expanded beyond mega-cap tech into more speculative areas of the market as thematic ETFs tied to quantum computing, space technology, semiconductors, and AI infrastructure hit fresh record highs. Investors increasingly appear willing to move further out on the risk curve as confidence around the AI growth cycle strengthens.
Oil Prices Pull Back on Iran Breakthrough Reports
Energy markets remained volatile throughout Thursday’s session as traders reacted to reports that U.S. and Iranian negotiators may have reached a framework for a temporary agreement aimed at reopening commercial shipping through the Strait of Hormuz. Crude oil prices initially surged earlier in the session before reversing lower after reports suggested both sides were nearing a 60-day memorandum tied to ceasefire negotiations and future nuclear discussions. Brent crude slipped back toward $92-$93 per barrel, while West Texas Intermediate crude fell below $90. While geopolitical uncertainty remains elevated, investors interpreted the reports as a potential sign that the worst-case scenario for global energy markets may be avoided, at least temporarily. Lower oil prices also helped improve sentiment around inflation-sensitive sectors.
Inflation Data Keeps Fed Outlook Complicated
Fresh economic data added another layer of complexity for investors attempting to gauge the Federal Reserve’s next move. The Personal Consumption Expenditures index, the Fed’s preferred inflation measure, rose 0.4% in April, slightly below expectations but still elevated enough to keep inflation concerns alive. Meanwhile, weekly jobless claims rose modestly to 215,000, signaling the labor market remains resilient despite higher interest rates. The mixed data left traders divided on the timing of future rate cuts, especially as energy prices and geopolitical risks continue influencing inflation expectations. Treasury yields fluctuated throughout the session as investors recalibrated expectations for monetary policy in the second half of the year.
Looking Ahead
Investors now turn their attention toward upcoming inflation reports, additional economic data, and continued developments in U.S.-Iran negotiations. Any meaningful breakthrough in the Middle East could further ease pressure on oil markets and improve sentiment across equities. At the same time, the AI trade remains firmly at the center of market leadership. Upcoming earnings from additional cloud, semiconductor, and enterprise software companies will likely determine whether the current rally can continue powering indexes toward fresh record highs. For now, Wall Street appears increasingly willing to look past geopolitical uncertainty as long as AI-driven earnings growth and corporate spending trends remain strong.