United States major benchmark averages rallied on Wednesday (Thursday AEST), with two of three major indices closing at record highs as investors reacted to signs of easing tensions between the United States and Iran, alongside strong earnings from key technology firms.
The Dow Jones Industrial Average rose 612.3 points, or 1.2%, to end at 49,910.6. The S&P 500 climbed 1.5% to a record 7,365.12, while the Nasdaq Composite gained 2% to close at an all-time high of 25,838.9.
Market optimism was fueled by reports suggesting Washington and Tehran are nearing an agreement that could reduce conflict in the Middle East.
The proposed deal is expected to include a pause on nuclear enrichment. Iranian officials indicated they are reviewing the U.S. proposal, although President Donald Trump later cautioned that an agreement is far from guaranteed.
“Assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end, and the highly effective Blockade will allow the Hormuz Strait to be OPEN TO ALL, including Iran,” Trump said in a post on Truth Social.
“If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before,” he added.
In a separate development, Trump announced a pause in “Project Freedom”, an initiative aimed at safeguarding shipping routes through the Strait of Hormuz, citing progress in negotiations with Iran.
Oil prices fell sharply as traders bet on a potential resolution to the conflict. West Texas Intermediate crude dropped 7.03% to settle at $95.08 per barrel, while Brent crude declined 7.83% to $101.27.
Technology stocks led the market gains, particularly in the semiconductor and artificial intelligence sectors. Advanced Micro Devices surged 18.6% after issuing a strong revenue forecast driven by demand for its data center chips.
Nvidia rose 5.7%, Intel added 4.5%, and Corning gained 12% after announcing a partnership with Nvidia to expand production of AI-related connectivity products.
Other notable movers included Hut 8, which jumped 35.3% following a long-term lease agreement for a major data centre project in Texas.
Super Micro climbed 24.5% on upbeat guidance, while Walt Disney rose 7.5% after beating earnings expectations and outlining its strategic outlook.
Uber Technologies also advanced 8.5% on strong booking forecasts.
Economic data further supported the rally. Private payrolls increased by 109,000 jobs in April, according to ADP, exceeding expectations and marking the strongest gain in over a year. The data pointed to continued resilience in the labor market despite geopolitical uncertainties.
Investors are now focused on the upcoming non-farm payrolls report, which is expected to show a 60,000 increase in jobs for April, following a 178,000 rise in March.
On the bond markets, yields declined modestly, with the 10-year Treasury yield falling to 4.352% and the 2-year yield easing to 3.87%.
