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The S&P 500 and the Nasdaq climbed to record levels on Thursday as crude oil prices continued to retreat, fueled by optimism surrounding a potential peace agreement between the US and Iran.
At 09:30 a.m. ET, the Dow Jones Industrial Average rose 192.59 points, or 0.39%, to 50,091.92, the S&P 500 rose 6.38 points, or 0.09%, to 7,374.11 and the Nasdaq Composite rose 40.33 points, or 0.16%, to 25,879.28.
The United States currently awaits Tehran’s response to a proposed deal aimed at concluding hostilities and reopening the Strait of Hormuz, a critical maritime artery for global petroleum transport.
The S&P 500 and Nasdaq reached record highs due to optimism surrounding a potential peace agreement between the US and Iran, which led to a slump in crude oil prices. Easing tensions in the Middle East and strong performances from technology companies also contributed to the rally.
Falling crude oil prices are easing inflation concerns, leading to hopes that the Federal Reserve might consider interest rate cuts later in the year. This shift in sentiment has positively influenced the stock market.
The Strait of Hormuz is a critical maritime artery for global petroleum transport. A potential peace deal between the US and Iran aims to conclude hostilities and reopen this crucial waterway, which has been impacted by the conflict.
DoorDash and Datadog shares rallied significantly due to strong quarterly performances and exceeding profit estimates. Vistra and McDonald's also saw gains. Conversely, Whirlpool shares plummeted after reporting a substantial loss driven by weakening sales.
Reports suggest that Iran is reviewing US proposals aimed at ending the conflict and reopening the Strait of Hormuz. Pakistan has been acting as a mediator, and there is optimism for an agreement soon, although details of the proposed memorandum of understanding are not fully disclosed.
On Wednesday, a spokesperson for Pakistan's Foreign Ministry said: "We expect an agreement sooner rather than later." Pakistan has been acting as a mediator between the United States and Iran.
Brent crude, the international benchmark, dropped another 3.8% to $97.38 per barrel, a sharp decline from the $115 peak seen earlier this week.
Although fuel costs remain elevated compared to pre-war levels, market sentiment has turned bullish as Iran reviews Washington's latest proposals to end the conflict.
Domestic economic data provided a mixed backdrop. While unemployment benefit applications rose last week, the figures were less severe than economists had anticipated. Conversely, a separate report indicated that US labor productivity growth was only half of the forecasted rate for the previous quarter.
In the bond market, the yield on the 10-year Treasury sank to 4.33% from 4.36% late on Wednesday.
DoorDash stock rose 3.09% following a robust quarterly performance, while cloud security firm Datadog shares rallied 33.6% after exceeding profit estimates.
Shares of utility provider Vistra gained 4.6% and McDonald’s edged up 0.6% as revenues slightly surpassed analyst expectations.
In contrast, Whirlpool shares plummeted 12.4% after the company disclosed an $85 million loss driven by weakening sales volumes.
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