US STOCKS-Wall St indexes advance with boost from chips, falling oil prices

U.S. stock indexes rebounded on Thursday, led by semiconductor shares, as optimism about a Middle East peace deal and a potential Apple-Intel chip deal eased inflation fears.

U.S. stock indexes rebounded on Thursday with semiconductor shares leading gains, as optimism about a Middle East peace deal helped ease inflation fears, although investors still priced in Federal Reserve interest rate increases. The Philadelphia semiconductor index sharply outperformed the rest of the market as Intel's shares jumped to a record high. ‌U.S. President Donald Trump said iPhone maker Apple had agreed to work with Intel to design and manufacture its chips in the U.S. Oil prices slid to their lowest levels since early March after the U.S. and Iran signed an interim agreement that extends the April ceasefire by another 60 days to allow the two sides to reach a final deal. All three of Wall Street's major indexes had tumbled in the previous session as investors priced ‌in the likelihood of Fed rate hikes, after the central bank's new Chair Kevin Warsh underscored the need to curb inflation and other policymakers signaled higher borrowing costs ahead. "There are three factors causing the ‌rally today. It's the continued excitement around the semiconductor sector and the continued decline of oil prices and the rethinking of yesterday's Fed meeting," said Eric Johnston, chief equity and macro strategist at Cantor in New York. Investors were still assessing the impact of Warsh's indication that the Fed would provide less guidance on future policy moves along with his stated focus on price stability, according to Johnston, who added that "the conclusion today is that the Fed has more credibility around inflation." At 2:17 p.m., the Dow Jones Industrial Average rose 139.91 ⁠points, or ​0.27%, to 51,632.46, the S&P 500 gained 75.04 points, or ⁠1.01%, to 7,495.29 and the Nasdaq Composite gained 403.52 points, or 1.55%, to 26,425.17. But while stocks were rallying, Brian Jacobsen, chief economic strategist at Annex Wealth Management, saw some investor doubts about whether the interim U.S.-Iran agreement would result in a lasting deal. That caution ⁠was partly reflected in trader bets on a 50% chance of a 25-basis-point rate hike as soon as September and a 17% probability for a 50-basis-point hike, according to CME Group's FedWatch tool.

Six out of 11 major S&P 500 sectors moved ​higher. Technology was leading gains with a 2.5% advance, followed by consumer discretionary, up 1.6%. Consumer stocks were boosted by the travel segment as lower oil prices supported rallies in cruise-line companies and airline ⁠stocks. The small-cap Russell 2000 index rose 1.6%.

On the data front, Labor Department data showed the number of Americans filing claims for unemployment benefits fell last week as layoffs remained low. In individual stocks, shares of Accenture tumbled more than 18% after the company trimmed the ⁠top ​end of its annual revenue forecast. Peers Cognizant Technology Solutions, Gartner and IBM fell in sympathy with declines between nearly 4% and more than 8%. The S&P 500 software and services sector was last down 0.6% after earlier falling to a more than two-month low. Among other movers, Kroger dropped 8% after the grocer reported a lower-than-expected profit for the first quarter and kept its annual forecasts unchanged. Shares in Elon Musk's SpaceX were ⁠down 6% around $180, in their second straight day of losses but were still trading above the $135 pricing for their market debut last Friday. Thursday also marks the once-in-a-quarter simultaneous expiry of derivatives contracts tied to stocks, ⁠index options and futures, also known as "triple witching", which can ⁠boost trading volume and aggravate volatility. Advancing issues outnumbered decliners by a 1.71-to-1 ratio on the NYSE, where there were 231 new highs and 163 new lows. On the Nasdaq, 2,879 stocks rose and 1,843 fell as advancing issues outnumbered decliners by a 1.56-to-1 ratio. The S&P 500 posted 29 new 52-week highs and 26 ‌new lows while the Nasdaq Composite ‌recorded 102 new highs and 123 new lows.