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Wall Street’s main indexes traded near record highs on Tuesday, with AI-fueled optimism offsetting concerns over Middle East peace talks after recent U.S. strikes on Iran.
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U.S. Secretary of State Marco Rubio said that the deal with Tehran could "take a few days," while Iran's Tasnim news agency reported that Tehran was seeking the release of US$24 billion of Iranian funds frozen overseas.
"It's cautious optimism in markets today with a singular focus on planning an off-ramp for this war, but with an understanding that it will take a while for energy prices and inflation to come back to earth," said Art Hogan, chief market strategist at B. Riley Wealth.
Brent crude oil rose as much as 2.7 percent but remained below US$100 a barrel, while global stocks wavered as uncertainty lingered over whether a deal would be reached to open up shipping flows through the Strait of Hormuz.
Semiconductor stocks, which have surged on AI-driven demand, led gains. Micron jumped 13.3 percent and Marvell Technology rose 7.4 percent, while Intel and Qualcomm added 1.6 percent each. The Philadelphia SE Semiconductor index rose 4.1 percent to an all-time high.
At 10:02 a.m. ET, the Dow Jones Industrial Average rose 73.76 points, or 0.15 percent, to 50,653.46. The S&P 500 gained 53.34 points, or 0.71 percent, to 7,526.81, and the Nasdaq Composite gained 295.88 points, or 1.12 percent, to 26,639.85.
The S&P 500 and the Russell 2000 both touched intraday record highs on Tuesday, underscoring the strength of the recent rally.
Eight of the 11 main S&P sectors were in the green, with the S&P 500 information technology subindex leading gains with a rise of 1.5 percent.
Upbeat earnings and renewed confidence in the AI trade have driven U.S. equities higher despite the ongoing conflict with Iran. Investors are now turning their attention to the upcoming IPOs of some of the largest private AI companies, including SpaceX.
Shares of space companies jumped, with Intuitive Machines gaining 16 percent, while Planet Labs and Rocket Lab rose 13.5 percent and 5 percent, respectively.
With the earnings season nearly over, first-quarter earnings growth is expected to be 29 percent year-on-year, up from the 16.1 percent estimated a month ago, according to LSEG data.
Kevin Warsh was sworn in as chair of the Federal Reserve on Friday. His appointment comes amid growing concerns about inflation, driven by higher oil prices, which have added to expectations of tighter global monetary policy.
Markets currently expect the Fed to keep rates on hold for the rest of the year, with a 25 basis point rate hike seen in December.
Advancing issues outnumbered decliners by a 3.13-to-1 ratio on the NYSE, and by a 2.27-to-1 ratio on the Nasdaq.
The S&P 500 posted 30 new 52-week highs and one new low, while the Nasdaq Composite recorded 128 new highs and 42 new lows.
Reuters
