On Thursday, the Dow Jones Industrial Average was up 211.81 points, or 0.74 per cent, to 28,956.90. The S&P 500 increased 21.65 points, or 0.67 per cent, to 3,274.70. The Nasdaq Composite Index rose 74.18 points, or 0.81 per cent, to 9,203.43, Xinhua news agency reported.
Shares of major US tech giants, including Facebook, Apple, Amazon and Google-parent Alphabet, closed higher, contributing the market gains.
All the 11 primary S&P 500 sectors rose at market closing, with technology up 1.13 per cent, outperforming the rest.
Trump said on Wednesday that no casualties resulted from Iran's missiles strikes in Iraq on Tuesday, sending signals of de-escalation while threatening Tehran with fresh sanctions.
"No Americans were harmed in last night's attack by the Iranian regime. We suffered no casualties," Trump said in a televised address after Iran launched more than a dozen ballistic missiles at Iraqi bases housing US troops.
The president also showed his restraint in his remarks, saying that "Iran appears to be standing down," which is "a good thing" for all parties concerned.
A US drone struck a convoy at Baghdad International Airport last Friday, killing Iranian Major General Qassem Soleimani, sparking outrage and revenge threats from Tehran.
On the data front, in the week ending January 4, US initial jobless claims, a rough way to measure layoffs, came in at 214,000, a decrease of 9,000 from the previous week's revised level, the Labor Department said on Thursday.
( With inputs from IANS )