U.S. stocks advanced 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 eased and economic data showed the U.S. economy continues to grow at a healthy pace, helping as investors geopolitical tensions and close the book on a month of solid gains.

The rally ‌gained momentum throughout the session, pushing all three major U.S. 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 after reporting a record quarter for its cloud unit.

Meta and Microsoft shares slid 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, was slated to report after the bell.

According ​to preliminary data, ‌the S&P 500 gained 74.29 points, or 1.04%, to end at 7,210.24 points, while the Nasdaq Composite gained 223.15 points, or 0.90%, to 24,890.36. The Dow Jones Industrial Average rose 796.27 points, or 1.63%, to 49,658.08.

CRUDE, ‌INFLATION & THE FED

A raft of economic data showed the U.S. 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.

"For now, ⁠we can label (inflation) as transitory," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"However, if the war continues and energy prices do not come down from the ⁠present levels, ⁠that transitory inflation will become constant inflation and certainly a major headache for the Federal Reserve," Cardillo added.

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 United States abandons its ceasefire and renews its attacks, suggesting that efforts to negotiate a peace deal have hit an impasse.

Top U.S. ‌military leaders were expected ​to brief President Donald Trump on potential ‌military action in Iran, a U.S. 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 surged after ​the drugmaker raised its annual profit forecast on sustained weight-loss drug demand.

Caterpillar shares jumped to a record high following the company's reported rise in first-quarter profit due to strong demand for its power generation and construction equipment.