Wall Street closed higher on Thursday as traders balanced tentative diplomatic progress in the Middle East against a series of mixed earnings reports. The S&P 500 and the Nasdaq both posted back-to-back all-time closing highs, and the Nasdaq extended its advance to a 12th consecutive session - the longest string of gains for the index since 2009.
Market participants also noted a slate of geopolitical and economic headlines that influenced sentiment. President Donald Trump said Israel and Lebanon had agreed to a 10-day ceasefire, and negotiators reported breakthroughs on several difficult points in talks related to the broader conflict. Optimism that the war with Iran might be moving toward an end was tempered by clear statements that Iran's nuclear program remained unresolved.
Those developments fed through to asset classes. Energy shares led gains among S&P sectors, with seven of the 11 major groups finishing the day higher. Crude benchmarks settled higher, and rising oil prices pushed U.S. Treasury yields up amid renewed inflation concerns. The dollar retraced some earlier losses and climbed against major currencies on what traders described as a technical recovery.
Economic data released on Thursday added another dimension to investor thinking. U.S. industrial production fell unexpectedly by 0.5% in March, driven in part by a pullback in motor vehicle manufacturing. Capacity utilization eased to 75.7%, a figure that sits 3.7 percentage points below its long-run average, underscoring lingering slack in factory operations.
In Europe, stock markets closed slightly lower as investors there weighed the same mix of diplomatic progress and corporate earnings. Separately, Germany revised its outlook for 2026 growth, cutting the forecast from 1.0% to 0.5% and raising inflation projections in light of an energy shock associated with the Iran conflict.
Political and regulatory developments were also in focus. The U.S. Securities and Exchange Commission approved a change to the so-called pattern day trader rule, eliminating the restriction that limited accounts under $25,000 to three day trades within five business days. Regulators and market observers warned this could open the door to more aggressive short-term trading by retail investors.
On the political front, President Trump prepared for a campaign-style tour through battleground states Nevada and Arizona, aiming to counter public concern over persistent inflation - particularly at the gasoline pump - and to shore up support for Republican candidates ahead of midterm contests. Observers noted a decline in the president's ability to boost fellow conservatives' prospects as higher living costs weigh on voter sentiment.
Other headlines referenced remarks by the pope. Pope Leo criticized what he called a "handful of tyrants" responsible for vast military spending and conflict in the world, delivering unusually pointed comments while visiting Cameroon. The statement followed an exchange of barbs between the pope and President Trump related to a social media post in which the president shared an image comparing himself to a religious figure alongside an American flag.
Market participants also tracked regulatory and personnel developments in Washington. Democratic Senator Elizabeth Warren said she believes there are gaps in the financial disclosures of Federal Reserve Chair nominee Kevin Warsh that may not comply with Senate ethics rules, and she called for a delay in his confirmation hearings. Meanwhile, investors were monitoring speeches scheduled from several Federal Reserve officials as potential catalysts for market moves.
Looking ahead, traders identified a handful of items that could move markets on the next trading day: any new developments in the Middle East negotiations, shifts in energy markets, social media posts from the president, upcoming trade balance figures for the euro zone and Italy for February, Canada housing starts for March, and remarks from San Francisco Fed President Mary Daly, Richmond Fed President Thomas Barkin, and Fed Governor Christopher Waller. On the corporate calendar, earnings from State Street, Fifth Third Bancorp, Regions Financial and Truist Financial were due.
Investment commentary and broader reading were suggested for market participants. A reminder was included about an upcoming webinar on April 23 in which Jamie McGeever and his ROI colleague Mike Dolan planned to discuss safe havens in uncertain times. Readers were also invited to sign up for a regular market newsletter.
For the day, key market moves included moderate gains for U.S. equities, nominal declines in European shares, energy leading U.S. sector performance, a stronger dollar on technical recovery, rising Treasury yields as crude prices climbed, and higher settlements for WTI and Brent crude amid lingering concerns that talks with Iran would not immediately resolve supply disruptions.
Summary takeaways
- U.S. equity indices closed higher, with the Nasdaq recording a 12-session winning streak and both the Nasdaq and S&P 500 marking consecutive closing records.
- Diplomatic progress in the Middle East and mixed corporate earnings were central to the day's market dynamics.
- Rising crude prices supported energy sector gains, lifted Treasury yields and renewed inflation anxieties.
What to watch next
- Middle East negotiation developments and their implications for energy markets.
- Upcoming speeches from Fed officials and scheduled corporate earnings from several banks and financial firms.
- Economic datapoints including trade balances and Canadian housing starts.