US stocks close higher; Nasdaq surges nearly 3%

US stocks closed higher on Thursday, led by a rally in semiconductor shares that rebounded from recent selling pressure after Microsoft's earnings renewed investor confidence in the outlook for artificial intelligence-driven demand.

The Dow Jones Industrial Average rose 613.92 points, or 1.19%, to close at 52,208.06.

The S&P 500 gained 121.48 points, or 1.66%, to 7,437.63, while the Nasdaq Composite jumped 679.24 points, or 2.78%, to 25,122.18.

In Europe, the STOXX Europe 600 advanced 0.77% to 649 points.

The UK's FTSE 100 slipped 0.10% to 10,897.30, while Germany's DAX gained 0.60% to 25,612.03 and France's CAC 40 rose 0.92% to 8,485.64.

In Japan, the Nikkei 225 climbed 0.70% to 61,867.43, while the broader TOPIX index fell 0.55% to 3,952.

Brent crude futures for September delivery fell 1.88%, or $1.71, to settle at $89.03 a barrel.

US WTI crude futures for September delivery declined 1.03%, or 87 cents, to $83.59 a barrel.

Meanwhile, August gold futures rose 1.58%, or $63.80, to settle at $4,100.10 an ounce.

What's driving the markets?

Strong earnings from technology companies, led by Microsoft, boosted risk appetite and lifted semiconductor stocks, while bets on further interest rate hikes eased after inflation data came in line with expectations. Investors also continued to monitor geopolitical tensions as a key source of market risk.