Stocks extended their streak of gains, pushing both the S&P 500 and Nasdaq 100 indexes to record highs, as investors piled into equities on optimism over the ceasefire between the US and Iran and robust corporate earnings.
The S&P 500 climbed 0.8% to close above 7,000 points, marking its first record since late January, with the technology and consumer discretionary sectors leading the advance. The Nasdaq 100, in the middle of its longest winning streak since 2019, rose 1.4% to notch a record of its own for the first time since October.
"Signs of de-escalation in the Middle East have lifted risk appetite, with falling oil prices helping ease inflation concerns," said Adam Turnquist, chief technical strategist for LPL Financial.
The rally continues what has been a stark turnaround for the stock market, where a selloff through the end of last month had pushed the S&P 500 more than 9% below its peak. The Nasdaq 100, for its part, entered a technical correction during the war, falling 12% from its record. That downturn erupted after the oil-price spike caused by the conflict threatened to slow growth and fan inflation - raising fears of 1970s-like stagflation.
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But signs of easing tensions in the Middle East, combined with optimism over artificial-intelligence technology and corporate earnings, have pushed skeptics to abandon their cautious views.
"It's difficult for investors to avoid the fear of missing out," said Matt Maley, chief market strategist at Miller Tabak + Co. "It reinforces the whole buy-the-dip mentality that has worked so well the last few years."
| Investors have piled into stocks on hopes over another round of talks between the US and Iran. The two are closer to extending a ceasefire and restarting negotiations about a longer-term peace deal, the Associated Press reported on Wednesday, even as a standoff intensifies over the Strait of Hormuz. Risk-on momentum among algo-driven funds, which had previously slashed equity exposure to multiyear lows, likely played a role in pushing the stock market higher. The so-called systematic investors are poised to deploy a record amount into US equities, Goldman Sachs Group Inc. traders wrote in a note to clients earlier in April. Tech stocks, in particular, have seen sharp gains since the ceasefire agreement. Coherent Corp., which supplies equipment to semiconductor makers, has risen some 31% since the agreement was reached on April 7. ALSO READ: Nikkei Leads Asia Market Surge Tracking Overnight Strength On Wall Street The Philadelphia Semiconductor Index, which includes mega-cap names such as Nvidia Corp., Broadcom Inc. and Micron Technology Inc. returned to record highs after the ceasefire announcement in early April. The strength has not been universal across the market. An equal-weighted version of the S&P 500 Index, which makes no distinction between a behemoth like Microsoft Corp. and relative minnow like News Corp., is still below its February high. Still, to Jonathan Krinsky of BTIG LLC, easing tensions in the Middle East coupled with the stock market's advance past its key support levels are likely to support the rally. "People are definitely going to get more constructive," Krinsky, chief market technician at the firm, said of the S&P 500 regaining its record high. "There's a variety of signals that suggest we're not going to go back and re-test the lows at this point." |
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