United States benchmark indices rallied on Thursday (Friday AEST), with the S&P 500 and Nasdaq Composite closing at fresh record highs, as investors responded positively to strong corporate earnings and looked past geopolitical concerns surrounding tensions between the U.S. and Iran.
The Dow Jones Industrial Average surged 790.3 points, or 1.6%, to close at 49,652.1. Meanwhile, the S&P 500 advanced 73.1 points, or 1%, to a record closing high of 7,209.0, and the Nasdaq Composite climbed 219.1 points, or 0.9%, also notching a fresh record finish at 24,892.3.
Market sentiment was buoyed by a series of upbeat earnings releases, alongside economic data that reinforced the resilience of the U.S. economy.
Data released during the session showed that U.S. gross domestic product (GDP) expanded by 2.0% in the first quarter of 2026.
At the same time, initial jobless claims fell to their lowest level since 1969, amid continued strength in the labour market.
However, persistently high energy prices kept year-on-year inflation above 3%, dampening expectations for imminent interest rate cuts by the Federal Reserve.
The update comes as Federal Reserve Chair Jerome Powell approaches the end of his eight-year tenure, with policymakers maintaining a cautious stance amid ongoing inflationary pressures.
In its most divided vote since 1992, the central bank opted to leave its benchmark interest rate unchanged, while flagging uncertainty stemming from elevated oil prices tied to ongoing tensions in the Middle East.
Among individual stocks, Caterpillar surged 9.9% to a record high after delivering stronger-than-expected quarterly results.
The industrial giant, often viewed as a bellwether for global economic activity, also raised its full-year revenue outlook, providing an additional boost to investor confidence.
Eli Lilly shares jumped 9.8% after the pharmaceutical company lifted its annual profit forecast, driven by sustained demand for its weight-loss treatments.
Attention also centred on results from several members of the so-called “Magnificent Seven” technology group. Alphabet rose 10.0% after reporting a record performance in its cloud division, while Amazon edged 0.8% higher.
In contrast, Meta Platforms and Microsoft declined 8.6% and 3.9%, respectively, as investor concerns grew over rising costs linked to artificial intelligence investments.
On the bond markets, yields moved lower, with the 10-year Treasury yield falling 1.3% to 4.374% and the 2-year yield declining 2% to 3.867%.
