United States equity markets closed higher on Tuesday (Wednesday AEST), with the S&P 500 and Nasdaq Composite reaching fresh record highs, supported by strong corporate earnings and gains in artificial intelligence-linked stocks, while easing oil prices further lifted sentiment.
The Dow Jones Industrial Average rose 356.4 points, or 0.7%, to 49,298.3. The S&P 500 advanced 58.5 points, or 0.8%, to finish at 7,259.2, while the Nasdaq Composite climbed 258.3 points, or 1%, to 25,326.1.
Investor confidence was underpinned by signs that a ceasefire between the United States and Iran remained intact, reducing immediate concerns about disruptions in the Strait of Hormuz, a critical global oil shipping route.
Washington said on Tuesday the ceasefire was holding, easing fears of an escalation in hostilities.
Despite the fragile backdrop, U.S. Defence Secretary Pete Hegseth said the ceasefire “certainly holds” and noted that “two U.S. commercial ships, along with American destroyers, have already safely transited the strait, showing the lane is clear”.
Earlier in the week, President Donald Trump said the U.S. would “guide” stranded vessels through the waterway.
Oil prices declined sharply, providing additional support for equities. West Texas Intermediate crude futures fell 3.9% to settle at US$102.27 per barrel, while Brent crude dropped 4% to $109.87 per barrel.
Technology stocks, particularly those linked to artificial intelligence, led the market higher. Advanced Micro Devices rose 4% ahead of its quarterly earnings release, while Intel surged 13% following a Bloomberg report that Apple was considering using the company’s chipmaking services for its core processors.
The broader rally was reinforced by a series of stronger-than-expected earnings results across sectors.
U.S.-listed shares of Anheuser-Busch InBev jumped 8.7% after reporting upbeat quarterly figures.
Archer-Daniels-Midland gained 3.8% on better-than-expected first-quarter profit driven by higher margins, while DuPont rose 8.4% after lifting its full-year profit outlook.
Pinterest shares also advanced 6.9% after the social media platform forecast second-quarter revenue above analysts’ expectations, signalling continued strength in digital advertising demand.
In contrast, Palantir Technologies declined 6.9% despite delivering first-quarter results that exceeded analyst forecasts and marking its fastest revenue growth since its 2020 public debut. The company also raised its full-year guidance, though investors appeared to take profits following recent gains.
Earnings season has broadly exceeded expectations. According to FactSet data, as of 1 May, “(with 63% of S&P 500 companies reporting actual results), 84% of S&P 500 companies have reported a positive EPS surprise and 81% of S&P 500 companies has reported a positive revenue surprise”.
On the economic front, data released Tuesday indicated that U.S. job openings fell to 6.866 million in March, slightly above the 6.84 million forecast.
The figures reinforced expectations that labour market resilience may allow the Federal Reserve to maintain higher interest rates for longer.
Meanwhile, the Institute for Supply Management’s (ISM) services purchasing managers’ index (PMI) came in at 53.6 for April, marginally below expectations of 53.7, pointing to continued, albeit slightly softer, expansion in the services sector.
On the bond markets, U.S. Treasury yields were little changed. The 10-year yield edged down 0.1% to 4.426%, while the 2-year yield was flat at 3.946%.
