United States benchmark averages ended higher in volatile trading on Thursday (Friday AEST), with the Dow Jones Industrial Average closing at a record high as investors monitored developments in U.S.-Iran peace talks alongside swings in oil prices and Treasury yields.
The Dow Jones Industrial Average rose 276.3 points, or 0.6%, to finish at a record 50,285.7. The S&P 500 gained 12.8 points, or 0.2%, to 7,445.7, while the Nasdaq Composite added 22.7 points, or 0.1%, to 26,293.1.
Investor sentiment remained sensitive to developments in the Middle East after officials pointed to progress in talks between Washington and Tehran, despite lingering disagreements over Iran’s uranium stockpile and control of the Strait of Hormuz.
U.S. Secretary of State Marco Rubio told reporters there had been "some good signs" in negotiations with Iran, although he warned a diplomatic agreement would be unworkable if Tehran imposed a tolling system in the Strait of Hormuz, a vital shipping route for global oil supplies.
Additionally, a senior Iranian source told Reuters no agreement had yet been reached with the United States, though differences had narrowed. Iran’s uranium enrichment program and control over the strategic waterway remained key sticking points.
Oil prices retreated after earlier gains linked to geopolitical tensions. Brent crude fell 2.3% to settle at $102.58 a barrel, while West Texas Intermediate crude declined 1.9% to close at $96.35 a barrel.
Treasury yields were also volatile during the session as traders weighed inflation risks tied to higher energy costs. Yields initially moved higher before easing later in the day, with the benchmark 30-year Treasury yield slipping 0.5% to 5.095% and the 10-year Treasury yield edging 0.3% lower to 4.572%.
Retail giant Walmart slumped 7.3% after forecasting second-quarter profit below analysts’ expectations while maintaining its full-year guidance.
Chief financial officer John David Rainey said consumers were being squeezed by elevated fuel prices and warned that if the "elevated cost environment persists, we'd expect somewhat higher retail price inflation in Q2 and the second half of the year".
Economic data released during the session reinforced expectations that the U.S. Federal Reserve may keep interest rates elevated for longer.
Weekly jobless claims declined, signalling continued resilience in the labour market, while U.S. manufacturing activity climbed to a four-year high in May as businesses increased inventories amid concerns over supply disruptions and rising prices linked to the Iran conflict.
Technology and quantum computing stocks were among the strongest performers following reports that the Trump administration would fund several quantum computing ventures in exchange for equity stakes.
IBM surged 12.4% after news that a new IBM-linked venture would be among the beneficiaries of the funding initiative.
GlobalFoundries climbed 14.9%, while D-Wave Quantum jumped 33.4%, Rigetti Computing advanced 30.6%, and Infleqtion gained 31.5%.
Software company Intuit plunged 20% after cutting its annual revenue forecast for TurboTax and announcing plans to reduce its workforce by 17%.
Meanwhile, investors also assessed NVIDIA's latest quarterly earnings report. The chipmaker exceeded Wall Street expectations for both earnings and guidance and announced an increase to its quarterly cash dividend to 25 cents per share.
However, NVIDIA shares still fell 1.8% as investors had anticipated another strong result amid continued enthusiasm around artificial intelligence.
Thursday’s gains followed a rally in the previous session that snapped a three-day losing streak for the S&P 500. Markets had been supported after President Donald Trump said the administration was in the “final stages” of negotiations with Iran.
