The S&P 500 index recorded its largest single-day gain in more than two months, halting a two-day losing streak. This surge followed comments from US President Donald Trump, who, after escalating threats of war with Iran, announced the cancellation of a planned military strike against Tehran.
The benchmark index climbed approximately 1.8% after President Trump indicated that a US-Iran agreement could be signed as soon as this weekend.
The technology-heavy Nasdaq 100 Index jumped 3.3%, marking its most significant daily advance since March.
The Philadelphia Semiconductor Index soared 7.9%, its largest gain since April 2025. Leading chip stocks, including NVIDIA and AMD, moved higher.
Eight of the S&P 500's 11 sectors finished in positive territory, with industrial and materials stocks leading the gains. The energy sector was the worst performer, weighed down by falling oil prices.
Traders are enthusiastic about President Trump's decision to call off the airstrike and the talk of "reconciliation," but a formal treaty has yet to be signed, according to Dave Mazza, CEO of Roundhill Financial. "If a deal is ultimately signed, the market still has considerable room to rise, as oil prices and volatility still price in significant conflict risk."
Oracle shares tumbled 8.5%, ranking among the S&P 500's biggest decliners. The drop came after the company reported quarterly capital expenditures that exceeded expectations.
Major indices faced pressure earlier in the session after a report showed US producer prices rising at their fastest pace in over three years, reinforcing market speculation that the Federal Reserve's next move could be an interest rate hike.
Boosted by SpaceX's record-breaking IPO and expectations for Middle East peace, the KBW Bank Index surged 1.9% to a record high.
At the close, the S&P 500 was up 1.8% at 7,394.3 points.
The Dow Jones Industrial Average rose 1.9% to 50,848.75 points.
The Nasdaq Composite Index gained 2.5% to 25,809.66 points.
The Nasdaq 100 Index advanced 3.3% to 29,446.18 points.
The Russell 2000 Index increased 3% to 2,921.029 points.