US stocks closed at a record high for the second day in a row, lifted by optimism the Iran war is drawing to a close and by bullish results from chipmaker Advanced Micro Devices Inc.
AMD surged 19%, the most since October, after a flood of AI data-center spending buoyed its sales forecast. Oil slid after Axios reported that the US and Iran were nearing an understanding to end the war.
The S&P 500 Index rose 1.5%, with nine of 11 sectors in the green, led by industrials and tech. With oil slumping, energy stocks saw the biggest declines, falling 4.1%. The Nasdaq 100 Index gained 2.1%, also closing at a record, while West Texas Intermediate crude oil retreated about 7% to around $95 per barrel.
News the US and Iran were circling around a fresh proposal to end the war buoyed sentiment. President Donald Trump, in remarks to PBS, said the war had "a very good chance" of ending, and it's possible a deal can be reached before his visit to China next week. Still, shipping companies remained wary about sending vessels through the Strait of Hormuz.
ALSO READ: Market Manipulation? $920 Million Crude Oil Shorts Placed Before US-Iran Deal News: Report
AMD, the leading challenger to Nvidia Corp. in AI computing chips, was among top S&P 500 gainers. An upbeat outlook from the second-biggest maker of computer processors positioned the sector for further advances after semiconductors and memory stocks helped propel the S&P 500 to a record close on Tuesday.
"The big picture takeaway is that the AI trade is alive and well," said Jack Janasiewicz, a portfolio manager at Natixis Advisors. He highlighted rising earnings-per-share and net margin estimates while stock multiples were holding steady.
| Highlighting the breadth of the rally, the S&P 500 equal-weighted index also closed at a record. This year, nine of 11 S&P 500 sectors are rallying, led by a 27% advance for energy stocks and 14% gains for materials and industrials. Only financials and healthcare are down for the year. The Philadelphia Semiconductor Index, known as the SOX, also ended the day at an all-time high. Other chips stocks rising Wednesday included Arm Holdings Plc, which was due to release results after the bell, with a 14% gain. Nvidia Corp. added 6%, the most since February. "It's hard not to be in awe of the strength, rapidity and vertical nature of the semiconductor rally," Wall Street strategist Peter Boockvar wrote in a Wednesday note. Still, he sounded a note of caution. "While business is obviously robust and the data center build-out is massive," he said, "I do have to wonder though how much of the order spurt for semis recently is due to double and triple ordering, especially with key suppliers in Taiwan and South Korea subject to energy and helium shortages." ALSO READ: Iran's Araghchi Endorses China's Four-Point Plan For Peace — Here's What It Entails In other earnings news, Walt Disney Co. climbed 7.5% to the highest since February after topping expectations on better streaming profitability, new movies and more spending at resorts and on cruises. Better-than-expected results from tech stocks in general are driving recent market gains. "Ten stocks are expected to account for over half of earnings-per-share growth this quarter," with seven of those megacap tech companies, Jonathan Golub, chief equity strategist at Seaport, wrote in a Wednesday note. JPMorgan Chase & Co., Citigroup Inc. and Eli Lilly & Co. round out the list, he says. The rally has been spurring more stock purchases. Last week was a "big buying week" for US equities, according to Bank of America strategist Jill Carey Hall. The bank's clients were net buyers after selling for two weeks, with purchases led by record equity ETF inflows of $6.8 billion, Hall wrote in a note. That suggested "strong equity optimism amid earnings despite continued geopolitical uncertainty." On the economic front, ADP reported US companies boosted payrolls in April by the most in over a year, though the number missed estimates. Attention now shifts to Friday's payrolls report and its potential influence on Federal Reserve interest-rate policy. Sectors in FocusMiners, cruiseline operators and airline companies rose on optimism the US and Iran were nearing an understanding to end the war, while energy and fertilizer stocks fell. Lower gasoline prices and greater economic certainty would also reduce pressure on US consumers, helping retailers broadly. Alphabet outperformed most Magnificent Seven stocks after the Information reported that AI startup Anthropic plans to spend about $200 billion with Google over five years. Homebuilders rallied, with the S&P builder index rising 2.5%. Yields on 10-year Treasuries, which are a benchmark for mortgage rates, fell along with oil. Separately, FHFA Director Bill Pulte told CNBC his agency will soon have an announcement "with a couple of builders," and cited two million lots "that are not being used." |
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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