Nasdaq, S&P 500 Reach New Record Closing Highs As U.S.-Iran Ceasefire Extended

(RTTNews) - Stocks showed a strong move to the upside during trading on Wednesday, more than offsetting the pullback seen over the two previous sessions. With the upward move, the Nasdaq and the S&P 500 reached new record closing highs.

The Nasdaq and S&P 500 saw further upside going into the close, ending the day just off their highs of the session. The Nasdaq surged 397.60 points or 1.6 percent to 24,657.57 and the S&P 500 jumped 73.89 points or 1.1 percent to 7,137.90.

The narrower Dow gave back ground after an early advance but still ended the day firmly positive, closing up 340.65 points or 0.7 percent at 49,490.03.

The notable rebound on Wall Street came in reaction to news that President Donald Trump has extended the U.S. ceasefire with Iran.

Calling Iran's government "seriously fractured," Trump said in a post on Truth Social that the U.S. would hold off on attacking Iran until their leaders "come up with a unified proposal."

However, Trump also said that he has directed the U.S. military to continue its blockade of all maritime traffic entering and exiting Iranian ports.

Iran dismissed Trump's ceasefire extension as "meaningless" and said the Strait of Hormuz will remain closed until the U.S. blockade is lifted.

Mahdi Mohammadi, a senior adviser to Iranian Parliament Speaker Mohammad Bagher Ghalibaf, termed the ceasefire extension a ploy "to buy time for a surprise strike," adding the "losing side cannot dictate terms."

Shortly after Trump's ceasefire announcement, Iran's Revolutionary Guard Navy claimed it has seized two container ships in Strait of Hormuz for "maritime violations."

The back and forth between Trump and Tehran has led to some uncertainty, although traders generally remain hopeful about an eventual resolution of the conflict.

Traders also continue to express optimism about the strength of corporate results, with earnings season off to a solid start.

"Investors appear to be focusing more on the direction of risk — whether things are improving or deteriorating — rather than the absolute level of geopolitical tension," said Daniela Hathorn, Senior Market Analyst at Capital.com.

"Earnings season is playing a key role in reinforcing this narrative," she added. "Expectations for continued double-digit earnings growth remain intact, helping to justify elevated equity valuations even as macro risks persist."

Sector News

Semiconductor stocks moved sharply higher over the course of the session, driving the Philadelphia Semiconductor Index up by 2.7 percent to a new record closing high.

Substantial strength was also visible among software stocks, as reflected by the 2.3 percent surge by the Dow Jones U.S. Software Index.

Computer hardware, oil service and gold stocks also saw considerable strength on the day, while airline stocks showed a significant move to the downside.

United Airlines (UAL) led the sector lower, plunging 5.6 percent after reporting better than expected first quarter results but providing disappointing guidance.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index rose by 0.4 percent, while Hong Kong's Hang Seng Index slumped by 1.2 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index slid by 1 percent, the German DAX Index are both fell by 0.3 percent and the U.K.'s FTSE 100 Index dipped by 0.2 percent.

In the bond market, treasuries showed a lack of direction after moving notably lower in the previous session. The yield on the benchmark ten-year note, which moves opposite of its price, crept up by less than a basis point to 4.294 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.