Wall Street closed higher on Thursday, driven by tech and healthcare stocks. Investors were encouraged by optimism around artificial intelligence (AI)-driven tech growth and defensive buying in healthcare stocks, while hopes of a 60-day U.S.-Iran ceasefire extension offset concerns over high inflation. All of the three benchmark indexes ended in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.1%, or 24.69 points, to close at 50,668.97. Sixteen components of the 30-stock index ended in negative territory, while 14 ended in positive.
The tech-heavy Nasdaq Composite added 242.74 points, or 0.9%, to close at 26,917.47.
The S&P 500 gained 43.27 points, or 0.6%, to close at 7,563.63. Five of the 11 broad sectors of the benchmark index closed in the green. The Health Care Select Sector SPDR (XLV), the Technology Select Sector SPDR (XLK) and the Consumer Discretionary Select Sector SPDR (XLY) advanced 1.4%, 1.3% and 0.5%, respectively, while the Utilities Select Sector SPDR (XLU) declined 1.1%.
The fear gauge CBOE Volatility Index (VIX) decreased 3.4% to 15.74. A total of 19.2 billion shares were traded on Thursday, higher than the last 20-session average of 19 billion. Advancers outnumbered decliners by a 1.74-to-1 ratio on the NYSE and by a 1.8-to-1 ratio on the Nasdaq.
Wall Street Climbs as AI Optimism Offsets Inflation and Geopolitical Risks
Wall Street ended higher on Thursday as investors remained focused on the long-term growth potential of AI and resilient corporate earnings despite persistent inflation concerns and Middle East tensions. The S&P 500 and the Nasdaq closed at record highs after reports suggested the U.S. and Iran had reached a draft agreement to extend their ceasefire for 60 days, easing fears of a broader regional conflict and potential energy supply disruptions.
Investor sentiment was also supported by expectations that geopolitical instability could drive additional spending on AI-related sectors such as cybersecurity, defense technology, energy infrastructure and supply-chain resilience. Markets largely looked past rising inflationary expectations, betting that the global economy and company earnings would remain strong enough to withstand near-term uncertainty.
Although the Dow Jones Industrial Average traded cautiously for much of the session, it managed to post modest gains by the close, reflecting broader confidence across equities. Investors also digested fresh inflation data while awaiting further clarity on whether U.S. President Donald Trump would approve the proposed ceasefire agreement.
Healthcare stocks extended their rally as investors sought defensive sectors amid inflation concerns, while optimism over resilient earnings and stable demand for medical services continued to support sentiment across the broader healthcare space.
Consequently, shares of Marvell Technology, Inc. MRVL and Eli Lilly and Company LLY rose 3.1% and 4.1%, respectively. Both currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
For the week ended May 23, initial jobless claims were 215,000, an increase of 5,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 209,000 to 210,000. The 4-week moving average was 209,000, an increase of 6,250 from the previous week's revised average. The previous week's average was revised up by 250 from 202,500 to 202,750.
Continuing claims during the week ended May 16 were 1,786,000, an increase of 15,000 from the previous week's revised level. The previous week's level was revised down by 11,000 from 1,782,000 to 1,771,000. The 4-week moving average was 1,772,750, an increase of 2,500 from the previous week's revised average. The previous week's average was revised down by 2,750 from 1,773,000 to 1,770,250.
PCE Inflation for April increased 0.4% after jumping 0.7% in March. Core PCE inflation increased 0.2% after rising 0.3% in March. While Personal Income remained unchanged, Personal Spending grew 0.5% in April after increasing 0.9% in March. Personal Savings Rate for April came in at 2.6%, after the number for March was revised down to 3.2% from the previously reported 4%.
GDP Second Estimate came in at 1.6% for the first quarter, revised down from the previous estimate of 2%.
The U.S. Census Bureau reported that Durable Goods Orders for April had increased 7.9%. The number for March was revised up to 1.3% from the previously reported 0.8%.
The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly reported that New Home Sales for April had fallen to 622,000. The number for March was revised down to 663,000 from the previously reported 682,000.
Per a government report, for the week ended May 22, 2026, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.3 million bpd from the previous week. The number for the week prior remained unrevised at a fall of 7.9 million bpd.
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This article originally published on Zacks Investment Research (zacks.com).