Wall St surges as US-Iran ceasefire holds after earlier jitters

NEW YORK: Wall Street’s main indexes jumped on Tuesday as the US-Iran ceasefire held firm despite the latest flare-up in tensions, allowing investors to shift focus to artificial-intelligence stocks and corporate earnings.

Washington said on Tuesday the ceasefire with Iran was intact, allaying worries that attempts by both sides to assert control over the Strait of Hormuz would lead to an escalation in hostilities.

With those fears easing somewhat, for now, investors were able to refocus on the fundamentals that have underpinned company earnings.

Chip designer AMD’s shares rose 3.2 percent ahead of results, due after market close. Intel rose 12.3 percent after Bloomberg News reported that Apple had held exploratory discussions about enlisting the company’s chipmaking services to produce the main processors for its devices.

The Philadelphia SE Semiconductor index gained 4.2 percent, while S&P 500 technology stocks rose 1.5 percent, both hitting all-time highs.

“What has stood out repeatedly is the resilience of corporate America,” said Brian Levitt, chief global market strategist at Invesco.

“It’s reasonable to expect that the geopolitical landscape will remain noisy. (But) the underlying businesses that make up the market will still be able to deliver growth.”

At 12:25 p.m. ET, the Dow Jones Industrial Average rose 277.80 points, or 0.57 percent, to 49,219.70, the S&P 500 added 60.35 points, or 0.84 percent, to 7,260.83, and the Nasdaq Composite gained 252.42 points, or 1.01 percent, to 25,320.22.

Brent crude futures lost 3.5 percent but were still trading above USD110 a barrel.

Ten of the 11 main S&P sectors were in the green.

As a net energy exporter, the US has so far held up better than several other economies. But some investors believe that is no justification for unfettered optimism, warning markets may not be fully pricing in risk.

“Even US equities won’t be insulated” if the Strait of Hormuz does not open, BlackRock Investment Institute analysts led by Global Chief Investment Strategist Wei Li said in a note.

The Federal Reserve also appeared unlikely to provide relief in the near term after data released on Tuesday showed US job openings fell to 6.866 million in March, slightly above the 6.835 million estimate. This reinforced the view that labor market resilience could give the central bank room to keep interest rates higher for longer.