Stocks surged on Tuesday, with the S&P 500 Index closing within sight of a fresh record as optimism on the possibility of further peace talks between the US and Iran pushed down oil prices.
The benchmark index finished 1.2% higher a day after erasing its war-driven losses, extending a rebound that has brought it to the brink of its late-January peak. The tech-heavy Nasdaq 100 rose 1.8% for a 10th straight day of gains - its longest such streak since 2021.
The US and Iran are looking to arrange a second round of peace talks in the coming days, while a standoff in the Strait of Hormuz worsens a global energy crisis and complicates diplomatic prospects. The objective is to hold more discussions before an April 7 ceasefire expires next week, according to people familiar with the matter.
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"It's not about whether there is progress in the peace talks, it's about whether we can reasonably hope that there might be progress in the peace talks," said Steve Sosnick, chief strategist at Interactive Brokers LLC. "Vibes are more powerful than reality."
Brent fell 4% toward $95 a barrel, as the International Energy Agency estimatied that the war will wipe out global oil demand growth for the first time since the 2020 pandemic. The dollar marked a seventh straight day of losses, while Treasuries strengthened.
Traders are also focused on first-quarter earnings at a time when the war in the Middle East is weighing on the outlook for the economy. JPMorgan Chase & Co. shares slipped despite a record quarterly trading revenue haul. Citigroup Inc. rose after reporting its highest quarterly return in five years on tangible common equity.
BlackRock Inc. took in a net $130 billion of client cash in the first quarter, with investor money continuing to pour in despite volatility in the public and private markets and protracted uncertainty over the war in Iran. Shares rose 3%.
"Profits drive the cycle and the global profit expectations have not been dented," said Tom Fahey, co-director of macro strategies at Loomis Sayles, during a panel on Tuesday.
Meanwhile, US wholesale prices rose by less than expected in March, despite a surge in energy costs tied to the Iran war, data from the Bureau of Labor Statistics showed. The producer price index rose 0.5%, with an underlying gauge that excludes food and energy up just 0.1%. Economists projected a 1.1% for the PPI from a month earlier.
The data follow figures last week that showed US consumer prices surged in March because of skyrocketing gasoline prices, even as underlying inflation came in below estimates.
"Companies continue to show remarkable resilience in the face supply chain, tariff, and now energy challenges," said Scott Helfstein, head of investment strategy at Global X ETFs. "This should be reassuring for investors."
At the same time, US energy stocks are poised to erase all of the gains seen since President Donald Trump started the war against Iran as oil prices pull back on the prospect of further negotiations aimed at ending the more than six-week conflict.
ALSO READ: US-Iran War: Qantas, Lufthansa, Virgin Atlantic Cut Routes, Raise Fares As Jet Fuel Prices Double
“A near‑term grind‑higher in equities remains possible if the ceasefire holds and earnings surprise to the upside, but this window looks inherently unstable,” wrote Barclays equity derivatives strategists led by Stefano Pascale.
Stocks
The S&P 500 rose 1.2% as of 4:09 p.m. New York time
The Nasdaq 100 rose 1.8%
The Dow Jones Industrial Average rose 0.7%
The MSCI World Index rose 1.3%
Currencies
The Bloomberg Dollar Spot Index fell 0.3%
The euro rose 0.3% to $1.1795
The British pound rose 0.5% to $1.3567
The Japanese yen rose 0.4% to 158.85 per dollar
Cryptocurrencies
Bitcoin rose 1.6% to $74,364.42
Ether rose 2.9% to $2,317.68
Bonds
The yield on 10-year Treasuries declined five basis points to 4.25%
Germany's 10-year yield declined seven basis points to 3.02%
Britain's 10-year yield declined nine basis points to 4.78%
Commodities
West Texas Intermediate crude fell 7% to $92.13 a barrel
Spot gold rose 2.2% to $4,843.94 an ounce
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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