Wall Street's main indexes advanced on Tuesday as reports of fresh efforts to resolve the Middle East conflict boosted sentiment and investors assessed the latest batch of bank earnings and U.S. inflation readings.
Talks to end the Iran war could resume in Pakistan over the next two days, U.S. President Donald Trump told the New York Post on Tuesday, after the collapse of weekend negotiations prompted Washington to impose a blockade on Iranian ports.
Meanwhile, Israeli and Lebanese envoys went into the talks hosted by U.S. Secretary of State Marco Rubio with conflicting agendas as Israel demanded Beirut disarm Iran-aligned Hezbollah.
With volatile oil prices dramatically impacting inflation expectations, the market has been sensitive to developments in the Middle East, with any headlines about setbacks sending stocks lower, while even tentative signs of an off-ramp have been sufficient to encourage investors eager for positive news.
Meanwhile, Tuesday's inflation data provided some signs of encouragement as U.S. producer prices increased less than expected in March as the cost of services was unchanged. And Ameriprise chief market strategist Anthony Saglimbene also cited a solid start to the U.S. earnings season as a boost for stocks.
"The market is kind of moving past this concept of peak uncertainty. There's been a lot of uncertainty in the market, whether that's coming from the Iran conflict, AI disruption fears, inflation concerns or Federal Reserve policy concerns," he said.
"Markets are starting to kind of walk away from some of the worst-case scenarios for these events and because valuations have improved over the last couple of weeks and months, investors are buying the dip right now."
At 2:33 p.m. the Dow Jones Industrial Average .DJI rose 254.15 points, or 0.53%, to 48,472.40, the S&P 500 .SPX gained 65.25 points, or 0.95%, to 6,951.49 and the Nasdaq Composite .IXIC gained 378.42 points, or 1.63%, to 23,562.15.
The S&P 500 .SPX rally put it about 0.4% below its late January record closing high. This was after Monday's close above its finish on February 27 - the last trading day before the U.S.-Israeli war on Iran began. Meanwhile, the Nasdaq 100 .NDX was set for a 10-day winning streak, which would be its longest since 2021.
Elsewhere, software stocks .SPLRCIS rose 1% after rallying sharply on Monday to put them on track for their biggest two-day gain since May last year. The Philadelphia Semiconductor index .SOX was up 1.4% after hitting a fresh record for the fifth day in a row.
On the earnings front, BlackRock BLK.N gained 3.1% after the asset manager reported a rise in first-quarter profit, helped by strong inflows into its exchange-traded funds and a sharp increase in performance fees.
Citigroup C.N shares were up 3.4%, hitting their highest in nearly two decades after beating first-quarter profit estimates, while Johnson & Johnson JNJ.N added 1.7% after reporting earnings.
However, JPMorgan JPM.N inched 0.5% lower following its first-quarter results, while Wells Fargo WFC.N declined 4.8% after interest income fell short of market expectations.
Meanwhile, United Airlines UAL.O and American Airlines AAL.O rose 1.8% and 7.6%, respectively. According to a Reuters report, two unnamed sources said that United CEO Scott Kirby had pitched a potential merger with American Airlines to Trump in late February, raising the prospect of a deal that could reshape the industry.
Shares of Globalstar GSAT.O jumped 9.4% after Amazon.com AMZN.O agreed to buy the satellite company.
Reuters
