The Nasdaq ended sharply higher on Thursday, as Micron Technology fuelled a rally in chip stocks that eclipsed fears that renewed US and Iranian attacks might prolong the Middle East conflict and fuel inflation.

Tehran said it hit US military targets in Kuwait, Qatar and Bahrain following US strikes against Iran on Wednesday.

The Dow and the S&P 500 also closed higher.

Micron Technology jumped 4.5 percent after the company laid out plans to invest more than US$250 billion in the US through 2035, to benefit from demand for memory chips to supply the boom in artificial intelligence.

Applied Materials climbed 3.2 percent and Sandisk surged 7.6 percent.

AI-related stocks have been volatile lately as investors worried about the sustainability of a rally that has helped Wall Street reach record levels in 2026.

This is still very much an AI bull market. For a bit, it was starting to broaden out, but that's contingent on oil prices and interest rates staying anchored, and with this flare-up in the Middle East, that calls that part of the bull market into question," said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky.

Meta Platforms rose after Reuters reported that the company plans to manufacture AI chips starting in September.

The S&P 500 climbed 0.8 percent to end the session at 7,543 points. The Nasdaq gained 1.3 percent to 26,206 points, while the Dow Jones Industrial Average rose 0.3 percent to 52,487 points.

With quarterly reporting season set to get under way, analysts on average expect S&P 500 earnings to increase 24 percent year-over-year, with technology companies accounting for much of that increase, according to LSEG. (Reuters)



Edited by Cecil Wong