US stocks: S&P 500, Nasdaq edge up to new records with Middle East hopes in focus

THE benchmark S&P 500 and the tech-heavy Nasdaq rose modestly to record closing highs for a second straight day on Thursday on optimism that the worst of the Middle East conflict had passed after Israel agreed to a temporary ceasefire with Lebanon and US.

President Donald Trump indicated the US and Iran could meet again on the weekend. Trading was choppy, however, after Trump announced the 10-day ceasefire between Israel and Lebanon and told reporters Iran had offered not to have nuclear weapons for more than 20 years. Earlier in the day, Bloomberg cited Gulf and European officials saying the US needs about six months to reach an Iran deal.

“You’ve got markets fluctuating between more positive and slightly neutral headlines,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management, in Charlotte, North Carolina, noting that for the last month and a half, “trading has all been about the Iran war.”

Mixed economic trends

While hopes of diplomatic progress have lifted sentiment this week, some strategists have said clearer signals of peace may be needed to sustain momentum.

However, in the options market, positioning and market momentum suggested the recent stock market rally has further room to run. Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas, also pointed to a mixed bag of economic data on Thursday.

New applications for US unemployment benefits fell more than expected last week, suggesting labour market conditions remained stable, though employers are cautious about increasing headcount as the war with Iran weighs on the economy.

“The war is still the single most important driver of the market,” said Phipps. “The rubber band was very stretched to the downside. It has snapped back and is no longer stretched to the downside ... Now the market needs to start trading on its own fundamentals.”

The Dow Jones Industrial Average rose 115.00 points, or 0.24 per cent, to 48,578.72, the S&P 500 gained 18.33 points, or 0.26 per cent, to 7,041.28, and the Nasdaq Composite gained 86.69 points, or 0.36 per cent, to 24,102.70. The Nasdaq and the S&P 500 touched intraday records on Thursday.

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Nasdaq’s gain represented its 12th consecutive advance, its longest winning streak since July 2009 after the global financial crisis.

Most of the S&P 500’s 11 major sector indexes gained. Healthcare was the biggest loser, finishing down 0.8 per cent, while the biggest gainer was energy, which rose 1.6 per cent as oil prices climbed.

Results steer sentiment

Investors were also reacting to corporate earnings during the first week of the first-quarter reporting season. US beverages company PepsiCo finished up 2.3 per cent after beating quarterly profit estimates. Medical device maker Abbott slumped 6 per cent and hit its lowest level since November 2023 after cutting its full-year profit forecast.

The S&P 500’s biggest decline on the day came from brokerage Charles Schwab, which tumbled 7.6 per cent after releasing results.

After finishing the regular session flat, Netflix shares fell 8 per cent in late trading after it reported quarterly results. The streaming company kept its 2026 revenue forecast unchanged and also announced that co-founder Reed Hastings would exit the company in June.

Big movers included Myseum, which rose 129 per cent to finish at US$3.30 after it rebranded as Myseum.AI. Its rally followed even more dramatic gains in sneaker maker Allbirds on Wednesday after it said it was pivoting to AI.

Voyager Technologies rose 8.8 per cent after Nasa signed an order for the company to conduct the seventh private astronaut mission to the International Space Station, the company’s first selection for such a mission.

Advancing issues outnumbered decliners by a 1.23-to-1 ratio on the NYSE, where there were 351 new highs and 40 new lows. On the Nasdaq, 2,516 stocks rose and 2,231 fell as advancing issues outnumbered decliners by a 1.13-to-1 ratio.

The S&P 500 posted 20 new 52-week highs and one new low while the Nasdaq Composite recorded 129 new highs and 39 new lows.

On US exchanges, 18.22 billion shares changed hands compared with the 19.11 billion moving average for the last 20 sessions. REUTERS