On Wall Street, the benchmark S&P 500 and tech-heavy Nasdaq rallied to record closing highs on Wednesday as investors were encouraged by corporate earnings and hopeful of progress in U.S.-Iran negotiations. The Dow Jones fell 72.27 points (−0.15%) to 48,463.72, while the S&P 500 rose 55.55 points (+0.80%) to 7,022.93 and the Nasdaq gained 376.93 points (+1.60%) to 24,016.02.
The benchmark S&P 500 index hit its first intraday record since the conflict erupted and notched a record closing high on Wednesday after ending Tuesday’s session slightly below the 6,978.60 record of January 27. White House press secretary Karoline Leavitt told reporters that discussions about a second round of talks with Iran were ongoing and productive but said reports that the U.S. requested a ceasefire in the Iran war were wrong.
The U.S. Treasury Department said it was targeting Iran’s oil transportation infrastructure with sanctions on more than two dozen individuals, companies, and vessels. 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.” Wall Street’s fear gauge, the CBOE volatility index, hit its lowest level since February 26 earlier on Wednesday.
Shares of Bank of America rose after the second-biggest U.S. lender reported growth in first-quarter profit. Shares of Wall Street heavyweight Morgan Stanley rallied after it reported a jump in quarterly profit. The S&P 500 information technology index advanced, with a boost from software stocks as the S&P 500 software and services index rallied in its third straight day of gains.
Some strategists cautioned that new catalysts may be needed to sustain market momentum. 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.
