Markets Climb Modestly as Tech Leads, Traders Weigh Geopolitics and Rate Outlook

U.S. stocks closed modestly higher on Thursday, extending their recent uptrend amid a mix of geopolitical unease and rate-friendly economic data. The S&P 500 gained 0.4%, edging out both the Nasdaq and the Dow, which each added 0.2%, while small caps lagged behind, pushing the Russell 2000 down 0.4%.

The day’s advance in large-cap indices reflected continued buying interest, driven by a fear of missing out following a strong rally off the April lows. Early pressure emerged from heightened trade tensions and growing instability in the Middle East, but softer economic data helped ease those concerns and fueled hopes for a potential rate cut later this year.

President Trump added fresh uncertainty to the trade outlook, stating that new trade term proposals will soon be sent to various countries—described as “take it or leave it” offers with little room for negotiation. At the same time, geopolitical headlines drew renewed attention after confirmation that U.S. Embassy staff in Baghdad were authorized to leave their posts. Further escalation came from an ABC News report suggesting Israel is considering military action against Iran, possibly with U.S. logistical support.

Despite the tense backdrop, economic data helped support market sentiment. The May Producer Price Index rose just 0.1%, cooler than the expected 0.2%, while weekly jobless claims showed a sharp increase in continuing claims, up 54,000 to 1.956 million—the highest since late 2021. These figures reinforced market expectations for a September rate cut, lifting equities off early lows.

Eight of the eleven S&P 500 sectors ended in positive territory. Technology was among the top performers, gaining 1.0%, second only to utilities, which rose 1.3%. The tech sector got a major boost from Oracle, which surged 13.3% to a new record high after beating Q3 estimates and issuing solid guidance for Q4. While chip stocks rallied early, momentum faded later in the day, with the PHLX Semiconductor Index ending just 0.3% higher.

On the downside, communication services fell 0.6%, making it the day’s weakest performer, though it remains one of June’s strongest sectors with a 3.2% gain month-to-date—outpacing the S&P 500’s 2.3%. Industrials also slipped, weighed down by a 4.8% drop in Boeing shares following news of an Air India 787 crash in Ahmedabad shortly after takeoff.

In the bond market, Treasuries rallied across the curve. Yields declined notably on longer-dated maturities, aided by strong demand in a $22 billion 30-year bond auction. The 10-year yield fell six basis points to 4.36%, ending just below its 50-day moving average.

Our U.S. portfolio, FTInvest 11, started the day with a noticeable decline to 772. However, losses gradually narrowed over the course of the session; in the final minutes, the index saw a renewed upward surge and ultimately closed the day with a 0.12% gain, finishing at 777.94.