(Updates prices to reflect U.S. market close)

* Nasdaq gains 1.3%, S&P 500 up 0.81%, Dow gains 0.27%

* US crude settles down 2.3% at $71.83 a barrel' Brent falls

2.5% to $76.05

* Lower jobless claims suggest stability in U.S. labor

market

* Chip stocks lead rally on optimism over coming SK Hynix

stock sale

By Pete Schroeder

WASHINGTON, July 9 (Reuters) - Wall Street surged on

Thursday while oil prices retreated, as investors rekindled

their enthusiasm for technology shares, shaking off worries

about renewed military action in the Middle East.

All three major U.S. indices ended the day higher, with the

Dow Jones Industrial Average climbing 0.27%, the S&P 500

rising 0.81% and the Nasdaq Composite jumping

1.3%.

The MSCI gauge of stocks across the globe

was up 0.72%.

Stocks rose despite renewed conflict in the Middle East, with

the U.S. and Iran both announcing military strikes in the Gulf

as their tenuous interim peace deal frayed. Oil prices, which

jumped when U.S. strikes were announced on Wednesday, retreated

on Thursday even though shipping activity through the critical

Strait of Hormuz has once again ebbed.

U.S. crude closed down 2.3% at $71.83 a barrel, while

Brent fell 2.5% to $76.05 per barrel.

TECH FOCUS

Global equity-market sentiment was buoyed by a report that China

could allow domestic AI firms limited access to AI leader

Nvidia's ( NVDA ) H200 chips, and following reports that SK

Hynix's forthcoming $28 billion U.S. share listing was more than

seven times oversubscribed.

The South Korean chipmaker intends to price its American

Depositary Receipts at $149, raising about $26.5 billion,

Reuters reported on Thursday.

The offering, which will finance new factories and equipment

to meet surging AI chip demand, is set to be the world's

second-biggest share sale after SpaceX's

record-breaking $85.7 billion IPO last month.

The Philadelphia SE Semiconductor index posted a second

day of gains, rising 3% on Thursday.

U.S. economic data was mixed, as the number of Americans filing

claims for unemployment benefits fell last week, but a separate

report found home sales unexpectedly dipping as house prices hit

a record high.

Initial claims for state unemployment benefits slipped 2,000

to a seasonally adjusted 215,000 for the week ended July 4, the

Labor Department said on Thursday.

The National Association of Realtors found tight inventory

drove up prices, underlining the affordability challenges facing

many potential homeowners in the U.S. Home sales dropped 2.4%

last month to a seasonally adjusted annual rate of 4.09 million

units. Economists polled by Reuters had forecast home resales

would climb to a rate of 4.20 million units.

Benchmark 10-year U.S. Treasury yields ticked lower

to 4.547% after reaching a seven-week high on Wednesday.

Currency markets were relatively muted, with the dollar index

, which measures the greenback against a basket of

currencies including the yen and the euro, falling 0.08% to

100.94. The pound strengthened 0.15% to $1.3406, reaching

four-week highs after striking a seven-month low in late June.

Wednesday's June FOMC minutes, the first under new Federal

Reserve Chair Kevin Warsh, had shown some growing concerns about

inflation. Markets have increased the implied probability of a

Fed hike this year to about 87%, according to CME FedWatch.

New York Fed President John Williams said on Thursday that he

did not expect a sustained rise in energy prices for the rest of

the year despite renewed Middle East conflict, but declined to

say what decision he would make on interest rates at a policy

meeting later this month.

Gold edged up 1.1% to $4,121.12 an ounce as oil

prices eased.

(Additional reporting by Stella Qiu in Sydney and Marc Jones in

London; Editing by Philippa Fletcher, Ros Russell, Tomasz

Janowski and Nia Williams)