US stocks advanced on Thursday and the S&P 500 and the Nasdaq logged their biggest monthly gains in years as solid corporate earnings offset the war-related oil supply shock that has rattled markets and sent crude prices to four-year highs.
But oil prices LCOc1, CLc1 eased and economic data showed the US economy continues to grow at a healthy pace, helping as investors looked past geopolitical tensions and closed the book on a month of solid gains.
The S&P 500 recorded its biggest monthly percentage gain since November 2020, while the Nasdaq’s monthly gain was its largest since April 2020. The Dow’s monthly advance was its biggest since November 2024.
The rally gained momentum throughout the session, pushing all three major US stock indexes sharply higher.
“A lot of the economic data calmed investors’ fears,” said Paul Nolte, senior wealth adviser & market strategist at Murphy & Sylvest in Elmhurst, Illinois. “Beyond that, you’ve got some pretty good earnings from a lot of different companies, and we’re seeing that broaden out today.”
“Until we see some changes to the market dynamic, as well as the economy, the momentum is on the bullish side,” Nolte added.
Industrials, powered by Caterpillar shares, put the Dow out front, while technology limited the Nasdaq’s gains in the wake of a spate of high-profile quarterly results released late Wednesday.
Four members of the Magnificent Seven group of artificial intelligence-related megacaps reported late Wednesday: Alphabet, Amazon, Meta Platforms and Microsoft.
Alphabet jumped 10.0% after reporting a record quarter for its cloud unit, while Amazon rose 0.8%.
Meta and Microsoft slid 8.7% and 3.9%, respectively, on concerns over artificial intelligence-related expenditures.
“The spending continues to be at pace,” Nolte said. “They’re seeing still very robust growth and some are starting to report a return on the investment, which is new.”
Apple, another Magnificent Seven constituent, is slated to report shortly.
The Dow Jones Industrial Average .DJI rose 790.33 points, or 1.62%, to 49,652.14, the S&P 500 gained 73.05 points, or 1.02%, to 7,209.00 and the Nasdaq Composite gained 219.07 points, or 0.89%, to 24,892.31.
Of the 11 major sectors in the S&P 500, only technology ended in the red, while communication services and industrials led the gainers.
Crude, prices, inflation and the Fed
A raft of economic data showed the US economy grew by 2.0% in the first three months of 2026, while initial jobless claims dipped to their lowest since 1969 and soaring energy prices kept year-on-year inflation above 3%, thwarting hopes of near-term rate cuts from the Federal Reserve as Jerome Powell’s eight-year tenure as chair draws to a close.
On Wednesday, in its most divided vote since 1992, the central bank let its key interest rate stand, while acknowledging uncertainties related to heightened crude prices due to the conflict in the Middle East.
That conflict showed no sign of abating, with Iran warning of retribution if the US abandons its ceasefire and renews its attacks, suggesting that efforts to negotiate a peace deal have hit an impasse. Top US military leaders were expected to brief President Donald Trump on potential military action in Iran, a US official told Reuters.
The possibility of protracted war, long-term disruption of traffic in the Strait of Hormuz, and the prolonged pressure on energy prices have dampened hopes for near-term policy easing from monetary policymakers.
Eli Lilly gained 9.8% after the drugmaker raised its annual profit forecast on sustained weight-loss drug demand.
Caterpillar shares rose 9.9%, touching a record high following the company’s reported rise in first-quarter profit due to strong demand for its power generation and construction equipment.
Advancing issues outnumbered decliners by a 4.1-to-1 ratio on the NYSE. There were 465 new highs and 56 new lows on the NYSE.
On the Nasdaq, 3,497 stocks rose and 1,251 fell as advancing issues outnumbered decliners by a 2.8-to-1 ratio.
The S&P 500 posted 37 new 52-week highs and 15 new lows while the Nasdaq Composite recorded 114 new highs and 98 new lows.
Volume on US exchanges was 16.96 billion shares, compared with the 17.73 billion average for the full session over the last 20 trading days.
