(JUne 11): US stocks gained Thursday following two straight sessions of losses, led by strength in chipmakers as investors assessed developments in the Middle East and a report that showed US producer prices climbed at the fastest pace in more than three years.
The S&P 500 Index was up 0.3% as of 9:38am in New York, The tech-heavy Nasdaq 100 Index advanced 0.8%, after posting its first back-to-back sessions with at least 1% declines since March on escalating tension between the US and Iran. The Philadelphia Semiconductor Index, home to chip bellwethers such as Nvidia Corp and Advanced Micro Devices Inc, rose 3% after sliding 3.6% Wednesday.
Among individual shares, Intel Corp rose 7.6% after BofA Global Research raised its recommendation to buy from underperform on expected growth from central-processing-unit sales. Oracle dropped 13% after the company reported quarterly capital expenses that were higher than estimates.
Major US indices briefly trimmed gains as the producer price index increased 6.5% from a year earlier, the most since November 2022, according to Bureau of Labor Statistics data. The data showed the fallout from the Iran war continued to fan inflation pressures, sustaining speculation the Federal Reserve’s next move will be to raise interest rates.
“This inflationary spike is likely temporary and will subside once the Iran war ends, but there is increasing concern that the Iran conflict will persist for some time, which means higher oil prices and higher inflation,” wrote Clark Bellin, president and chief investment officer at Bellwether Wealth.
A strong reading on the US labour market last week helped soothe concerns about slowing growth, though at the same time it renewed worries about high prices. Traders will get another update on inflation with the University of Michigan’s survey of inflation expectations on Friday.
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Concern about sticky inflation and the pressure on the Fed to contain it briefly pushed the Cboe Volatility Index, or VIX, above 21, a level that signals concern among traders. With Elon Musk’s SpaceX expected to go public this week, the prospect of another trillion-dollar-plus company hitting the market may be forcing investors to reposition portfolios at the cost of their tech stocks, analysts say.
Shares in rocket, satellite and space-linked companies including Redwire Corp and Firefly Aerospace Inc advanced 3.9% and 6.2% before the much-anticipated SpaceX initial public offering.
Lingering worries about an escalation of the Middle East conflict whipsawed the oil market, pushing shares of Chevron Corp and Exxon Mobil Corp up nearly 1%.
See also: Tech stocks sink as oil jumps on US-Iran jitters
Elsewhere, DXC Technology shares jumped 2.1% after the IT services firm announced a multi-year global partnership with Anthropic to integrate Claude AI models into the enterprise systems DXC operates for banks, airlines, insurers, manufacturers and government agencies.
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