The benchmark S&P 500 and the tech-heavy Nasdaq extended their recent gains on Wednesday as investors focused on a fresh round of corporate earnings while assessing the latest developments in the Middle East.
Equities have found support this week on expectations that Washington and Tehran could return to negotiations to end the war, which has disrupted global oil markets, revived inflation concerns and clouded the interest-rate outlook.
The S&P 500 is hovering just below its first intraday peak since the conflict began and is on track to close at a record if current levels hold.
“The markets don't need a finished deal to rally. All they need is evidence that talks will happen,” said Shay Boloor, chief market strategist at Futurum Equities.
“They are willing to digest all of this overseas heartburn because AI is so real and the rate of change is so exponential that it's too egregious to be on the sidelines and not participate.”
At 11:48 AM ET, the Dow Jones Industrial Average fell 189.47 points, or 0.39 per cent, to 48,346.52.
The S&P 500 gained 30.48 points, or 0.44 per cent, to 6,997.86, while the Nasdaq Composite advanced 246.98 points, or 1.05 per cent, to 23,886.07.
The CBOE Volatility Index (VIX), often referred to as Wall Street’s fear gauge, edged lower by 0.31 point to 18.06.
Shares of Bank of America rose 1.9 per cent after the lender reported growth in first-quarter profit, while Morgan Stanley climbed 4.4 per cent on a jump in quarterly earnings.
The S&P 500 financial index advanced 0.6 per cent.
The information technology index gained 1.5 per cent, supported by continued strength in software stocks.
Quantum computing companies saw sharp gains, with Rigetti Computing, D-Wave Quantum and Arqit Quantum rising 11.8 per cent, 15.9 per cent and 18.8 per cent, respectively.
Analysts cautioned that further gains may depend on concrete progress in geopolitical developments.
“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 on Tuesday lowered its global growth outlook, citing war-driven energy price spikes, and warned that a prolonged conflict could push the world towards a recession.
Oil prices edged higher on Wednesday and remain around 31 per cent above pre-war levels.
Six of the 11 S&P 500 sectors declined, with the materials index leading losses, down 1.4 per cent.
Meanwhile, Cleveland Federal Reserve President Beth Hammack said there is no immediate need to change interest rates, though both cuts and hikes remain possible.
Broadcom gained 3.1 per cent after Meta extended its custom chips agreement with the company.
Snap rose nearly 8 per cent after announcing plans to lay off about 1,000 employees, while Allbirds surged more than eightfold following its plan to pivot to AI infrastructure.
Advancing issues outnumbered decliners by a 1-to-1 ratio on the NYSE and by 1.2-to-1 on the Nasdaq.
The S&P 500 recorded 10 new 52-week highs and one new low, while the Nasdaq logged 75 new highs and 32 new lows.
