Wall Street and European stocks rebound as tech optimism outweighs Middle East worries

Global stock markets experienced a significant rebound on Thursday, with Wall Street and European indices showing strong gains. The rally was primarily driven by renewed enthusiasm for technology shares, overshadowing concerns about escalating tensions in the Middle East.

All three major U.S. indices closed higher: the Dow Jones Industrial Average rose 0.27%, the S&P 500 climbed 0.81%, and the Nasdaq Composite jumped 1.3%. The MSCI gauge of global stocks also saw a positive trend, increasing by 0.72%.

Optimism surrounding the technology sector was bolstered by reports suggesting China might grant domestic AI firms limited access to Nvidia's H200 chips. Furthermore, SK Hynix's forthcoming $28 billion U.S. share listing was reportedly oversubscribed more than seven times, indicating strong investor demand. This offering aims to fund new factories and equipment to meet the surging demand for AI chips, positioning it as the world's second-largest share sale after SpaceX's recent IPO.

Despite renewed military strikes announced by both the U.S. and Iran in the Gulf, oil prices retreated. U.S. crude settled down 2.3% at $71.83 a barrel, and Brent crude fell 2.5% to $76.05 per barrel. Shipping activity through the Strait of Hormuz, a critical chokepoint, had decreased, but the market focus remained on the tech sector's performance.

U.S. economic data presented a mixed picture. While initial jobless claims fell last week, suggesting stability in the labor market, a separate report indicated a surprise dip in home sales. This decline occurred even as house prices reached a record high, highlighting affordability challenges for potential homeowners.