The tech-heavy Nasdaq rallied 1% and the benchmark S&P 500 touched an intraday record high on Wednesday, as investors were encouraged by corporate earnings and hopeful of progress in U.S.-Iran negotiations.
Equities have found support this week from investor hopes that Washington and Tehran could return to the negotiating table with a view to ending the war, which has caused widespread disruption in global oil markets, reignited inflation concerns and muddied the interest-rate outlook.
The benchmark S&P 500 index .SPX briefly touched its first intraday record since the conflict erupted. It would notch a record closing high if it ends above the 6,978.60 level.
The gains suggest that war-weary investors are ready to rotate into risk assets at the slightest indication of a de-escalation in the conflict. Jeff Schulze, head of economic and market strategy at ClearBridge Investments, said a ceasefire extension or progress in U.S.-Iran negotiations would be "a pretty good development for the energy market and then the U.S. economy."
"Markets rarely wait for information to be complete," he said. "Although there is still uncertainty out there with regard to the energy disruption, markets are rightly assessing that the risks are declining and the path of least resistance is up."
Schulze also said that while earnings season is still relatively young, "it's off to a good start so far."
Shares of Bank of America BAC.N were up more than 2% after the second-biggest U.S. lender reported growth in first-quarter profit. Wall Street heavyweight Morgan Stanley MS.N climbed 4.5% after it reported a jump in quarterly profit. The S&P 500 financial index .SPSY gained more than 1%.
S&P INTRADAY RECORD
At 2:20 p.m. EDT, the Dow Jones Industrial Average .DJI fell 118.22 points, or 0.25%, to 48,416.63, the S&P 500 .SPX gained 38.78 points, or 0.56%, to 7,006.11 and the Nasdaq Composite .IXIC gained 266.96 points, or 1.13%, to 23,906.05.
Wall Street's fear gauge, the CBOE volatility index .VIX, was down slightly as it pared losses after hitting its lowest level since February 26.
The S&P 500 information technology index .SPLRCT rose 1.4%, leading S&P sector gainers. It was boosted by software stocks, with the S&P 500 software and services index .SPLRCIS up more than 4%, in its third straight day of gains.
Still, six of the 11 S&P 500 sector indexes were losing ground, with industrials .SPLRCI and materials .SPLRCM leading the declines of more than 1%.
MORE EVIDENCE NEEDED
Some strategists cautioned that new catalysts may be needed to sustain market momentum.
"We're going to need more concrete evidence now that the folks that want to get together and talk about peace are able to accomplish something before the deadline of this ceasefire," said Art Hogan, chief market strategist at B. Riley Wealth.
The International Monetary Fund cut its global growth outlook on Tuesday, citing the war-driven energy price spikes, and warned that an extended conflict could push the world to the brink of recession. But meanwhile, Federal Reserve Bank of Cleveland President Beth Hammack said while she sees no imminent need for the central bank to change its interest-rate target setting, it is possible cuts or even hikes could lie ahead.
Oil prices rose slightly on Wednesday. They are still hovering more than 30% above pre-war levels.
QUANTUM COMPUTING
Quantum computing stocks rallied, with Rigetti Computing RGTI.O up more than 11% while D-Wave Quantum QBTS.N rose about 19% and Arqit Quantum ARQQ.O added 14%.
Among other stock movers, Broadcom AVGO.O advanced more than 3% after Meta META.Oextended its custom chips deal with the firm.
Snap SNAP.N rose nearly 8% after it said it would lay off about 1,000 employees, while footwear maker Allbirds BIRD.O surged more than 600% following an announcement that it would pivot to AI infrastructure.
Advancing issues outnumbered decliners by a 1.09-to-1 ratio on the NYSE, where there were 193 new highs and 38 new lows. On the Nasdaq, 2,562 stocks rose and 2,074 fell as advancing issues outnumbered decliners by a 1.24-to-1 ratio. The S&P 500 posted 12 new 52-week highs and one new low.
Reuters
