NEW YORK: The S&P 500 and the Nasdaq hit record highs on Wednesday, buoyed by signs of a resolution in the Middle East conflict, while strong earnings from Advanced Micro Devices sparked a rally in chipmakers.
Advanced Micro Devices’ shares rose nearly 17 percent to a record high after the company forecast second-quarter revenue above expectations on robust demand for its data-center chips.
Shares of rival Intel jumped 2.4 percent, while a broader gauge of US chipmakers climbed 3.5 percent to a fresh peak on continued optimism around AI demand.
Global stocks surged and oil prices slumped following reports that the United States and Iran were closing in on an agreement for a one-page memorandum to end the war in the Gulf region. Iran said it was reviewing a new US proposal.
In its current form, the memorandum would declare an end to the conflict and the start of a 30-day period of negotiations on a detailed agreement to open the Strait of Hormuz, limit Iran’s nuclear program and lift US sanctions, Axios reported.
Oil prices fell below USD100 a barrel for the first time since April 22, helping ease concerns about inflationary pressures.
“The market is responding to the de-escalation optimistically, on top of a strong earnings season,” said Josh Chastant, managing director, public markets at GuideStone Funds.
US stock markets have remained resilient in recent weeks even as diplomatic efforts to end the conflict have failed to produce a breakthrough, with investors instead focusing on the earnings season. S&P 500 companies are on track for their highest profit growth in more than four years.
Of the 314 S&P 500 companies that reported through May 1, 83 percent beat analysts’ profit estimates, according to LSEG I/B/E/S data.
At 12:30 p.m., the Dow Jones Industrial Average rose 510.85 points, or 1.04 percent, to 49,809.10, the S&P 500 gained 82.14 points, or 1.13 percent, to 7,341.36 and the Nasdaq Composite gained 395.68 points, or 1.56 percent, to 25,717.84.
US private payrolls posted their largest increase in 15 months in April, pointing to continued labor market stability even as the conflict in the Middle East clouds the economy’s outlook.
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