U.S. equities pushed to new closing peaks on Wednesday as traders balanced signs of potential de-escalation in the U.S.-Iran conflict with incoming corporate earnings. The S&P 500 and the Nasdaq each finished the session at record closing levels, driven largely by strength in technology stocks and growing investor confidence that a durable uptrend remains in place despite ongoing geopolitical uncertainty.
Market participants were also reminded of an upcoming event: Jamie McGeever will host an LSEG webinar on April 23 with colleague Mike Dolan to discuss safe havens in uncertain times.
Recommended reading to contextualize the session:
- U.S. President Donald Trump said the war on Iran was nearing its conclusion amid a diplomatic push to continue peace talks
- The International Monetary Fund cautioned countries against implementing broad fuel subsidies to cope with war-related energy shock
- Bank of America beat first-quarter profit estimates as market volatility boosted trading revenue to a record
- Morgan Stanley, benefiting from a surge in dealmaking and record equities trading revenue, also beat first-quarter profit expectations
- Cleveland Fed President Beth Hammack said that while she sees no immediate need for the Fed to change its target rate, rate cuts or even hikes are possible down the road
Market action and sector detail
Technology shares were the primary engine behind the moves higher, lifting the Nasdaq and supporting the S&P 500’s advance to a record close. European equities declined as investors parsed the evolving Middle East situation and the latest batch of corporate results.
- Of the 11 major S&P 500 sectors, four closed higher, with technology leading the gains.
- The S&P 500 Software & Services index, which had been under pressure amid concerns about AI-driven disruption, outperformed decisively and jumped 4.3 percent.
- The U.S. dollar finished essentially unchanged after a range-bound session.
- Benchmark U.S. Treasury yields moved higher as markets weighed President Trump’s comments that the conflict could be nearing its end.
- Oil prices were mixed: U.S. WTI crude settled essentially flat while Brent crude finished slightly higher.
- Gold drifted lower as investors assessed signals from the U.S.-Iran situation.
Notable company and policy developments
In a notable corporate pivot, shoe maker Allbirds saw its stock surge 582.3 percent after revealing plans to shift focus from footwear into AI computing infrastructure. The company disclosed a $50 million convertible financing arrangement with an institutional investor, stating the proceeds will be used to acquire graphics processing units.
Banking results added to the market backdrop. Bank of America surpassed first-quarter profit estimates, aided by record trading revenue driven by market volatility. Morgan Stanley similarly outperformed expectations, reporting strength from a rebound in dealmaking and record equities trading revenue.
On monetary policy and politics, President Trump has threatened to remove Federal Reserve Chair Jerome Powell from his separate seat on the Fed’s Board of Governors if Powell does not relinquish that post when his term as Fed chair ends on May 15. The administration’s threats, along with an ongoing criminal investigation mentioned in recent reporting, could complicate and delay Senate consideration of Kevin Warsh, Trump’s nominee to replace Powell.
Talking points from the trading day
- The S&P 500 and the Nasdaq reached their first record closing highs since the U.S.-Iran conflict began. Hopes for de-escalation and healthy earnings expectations helped propel the indexes to all-time closing levels, reinforcing investor belief that the broader bull market remains intact.
- Achieving those records amid an ongoing geopolitical crisis suggested a shift in market positioning. Traders appeared more willing to price in a lower near-term escalation risk.
What could move markets next
Market participants will be watching a mix of geopolitical, economic and corporate developments that could influence positioning in the near term:
- Further developments in the Middle East
- Movements in energy markets
- Social media posts from President Trump
- U.S. weekly jobless claims
- U.S. industrial output for March
- UK GDP for February and UK industrial output for February
- Euro zone consumer prices for March
- CPI readings for Austria, Italy, Poland and Croatia for March
- Federal Reserve officials scheduled to speak: New York Fed President John Williams and Fed Board Governor Stephen Miran
- Companies reporting first-quarter results tomorrow include Netflix, U.S. Bancorp, Travelers Companies and PepsiCo
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