Wall Street’s main indexes edged higher after US President Donald Trump extended the ceasefire with Iran, even as uncertainty remained over whether Tehran and US ally Israel would honour the truce.
Trump said the indefinite extension of the ceasefire followed a request by Pakistani mediators. However, the US Navy’s blockade of Iranian ports remained in effect, and Iran seized two ships in the Strait of Hormuz.
The opening of the waterway, responsible for about 20 per cent of global oil supply, remains a major unknown for investors and has been one of the sticking points in the negotiations.
The bullish sentiment despite the uncertainty points to a market desperate to cling to good news, and reflects investor belief that despite setbacks, the war will be settled at the negotiating table instead of the battlefield.
“At some stage, this rally is going to come to a halt. But I don’t think that the majority of investors feel that way at all,” said David Morrison, senior market analyst at Trade Nation.
In early trading on Wednesday, the Dow Jones Industrial Average rose 343.83 points, or 0.72 per cent, to 49,504.58, the S&P 500 gained 45.98 points, or 0.65 per cent, to 7,109.99 and the Nasdaq Composite gained 185.28 points, or 0.76 per cent, to 24,445.24.
Risks of an inflation flare-up remain, with oil prices near the $US100-a-barrel mark ($A140-a-barrel mark). This lifted the benchmark’s energy sector 1.2 per cent higher.
“It’s possible that we see a continuation of negative headlines, ultimatums and deadlines for negotiations, but that doesn’t mean that stocks will react meaningfully to each one, since markets already priced-in the worst of the conflict during the lows made back in March,” said Rick Gardner, chief investment officer, RGA Investments.
Information technology stocks were the biggest boosts on the Nasdaq Composite and the S&P 500, with the sector adding 0.6 per cent.
The Philadelphia SE Semiconductor Index hit a fresh peak and was on track for its 16th straight day of gains — its longest streak ever.
Seagate jumped 2.2 per cent after Barclays upgraded the data storage firm’s rating to “overweight”.
A strong run of earnings so far has reassured Wall Street about the health of the US consumer, the growth engine of the economy.
S&P 500 EPS estimates for 2026 and 2027 have risen by four per cent since late January, according to data from Goldman Sachs.
GE Vernova advanced 13.3 per cent after the power equipment maker raised its annual revenue forecast. Medical device maker Boston Scientific’s shares were up 8.2 per cent after first-quarter results.
Shares of planemaker Boeing rose 1.6 per cent after a smaller-than-expected quarterly loss, and were among the biggest boosts on the Dow.
United Airlines, however, declined 3.7 per cent after forecasting second-quarter and full-year profits below Wall Street estimates as higher jet fuel prices squeeze margins and cloud its near-term outlook.
EV giant Tesla, chipmaker Texas Instruments and Southwest Airlines will report after markets close.
Adobe was 3.2 per cent higher after it unveiled a share repurchase program worth up to $US25 billion ($A35 billion).
Robinhood gained 2.9 per cent after the retail trading platform’s venture fund invested $US75 million ($A105 million) in ChatGPT maker OpenAI. Advancing issues outnumbered decliners by a 3.06-to-1 ratio on the NYSE and by a 2.63-to-1 ratio on the Nasdaq.
The S&P 500 posted 26 new 52-week highs and one new low while the Nasdaq Composite recorded 79 new highs and 26 new lows.
