(Investing) – Wall Street pushed higher on Wednesday, as sentiment was helped by an extension to a ceasefire between the U.S. and Iran. President Donald Trump also hinted at more peace talks.
Market participants were also looking past the Middle East conflict and focusing on the first quarter earnings season, which continues to gather momentum. Results from the Magnificent 7 club will be kicked off by Tesla after hours.
At 11:15 ET (15:15 GMT), the benchmark S&P 500 index was up 0.8% to 7,121.85 points, the tech-heavy NASDAQ Composite added 1.2% to 24,558.03 points, and the blue-chip Dow Jones Industrial Average gained 0.8% to 49,521.25 points.
Trump Extends Ceasefire After Breakdown in Talks
The main averages ended in the red on Tuesday after media reports hinted at a breakdown in more peace talks between the U.S. and Iran. Just minutes after the closing bell, Trump said on social media that he would extend an ongoing two-week ceasefire with Iran — which was supposed to end on Wednesday — until such a time that Tehran would be able to present a unified negotiating proposal.
Trump said the decision was made based on the fact that the Iranian government was “seriously fractured” and after a request from Pakistan, which has emerged as the key mediator between the warring parties.
Planned peace talks came to a standstill before Trump’s announcement, with U.S. Vice President JD Vance reportedly calling off his trip to Islamabad in Pakistan and Iran’s Tasnim News Agency saying the country had decided not to attend the talks.
But Trump on Wednesday told the New York Post that talks were “possible” as soon as Friday. Iran, for its part, kept up a harsh public rhetoric, with state media saying Tehran had decided not to join any new round of talks with the U.S., citing Iran’s foreign ministry spokesperson. State media also said Iran had not yet announced an official position on the extension of the ceasefire.
Three Ships Attacked Near Strait of Hormuz
Three ships were attacked near the critical strait on Wednesday, despite Trump’s announcement of the ceasefire extension. Iran’s state media reported that the paramilitary Islamic Revolutionary Guards Corps had attacked a ship in the strait, saying the vessel was “stranded” on the Iranian coast.
Shipping monitor UK Maritime Trade Operations Centre said a separate container ship in the strait was attacked, shortly after a boat belonging to the Revolutionary Guards struck a ship in the area. Iranian state media claimed that the Revolutionary Guards seized these two vessels.
Trump has said an ongoing U.S. blockade of Iranian ports and coastline — an action that Iran’s foreign minister has argued constitutes an “act of war” — will stay in place. He argued that Iran is “collapsing financially!” and wants the strait to be “opened immediately” because Tehran is “Starving for cash.”
Tanker shipping through the strait, a vital waterway off of Iran’s southern coast through which roughly a fifth of the world’s oil traverses, has been all but closed since the start of the war in late February.
Oil prices rose on Wednesday, with Brent crude futures, the global benchmark, topping $100 a barrel. A spike in crude compared to pre-war levels has sparked fears over an inflationary surge that could weigh on global growth and cause central banks to hike interest rates.
Spotlight on Earnings Season
Wall Street last week reclaimed record levels for the first time since the end of January, underscoring a remarkable rebound from war-driven lows in March. The S&P 500 and the Nasdaq Composite ended the week by notching three straight record closes each.
However, the rally wobbled this week on Monday and Tuesday amid dwindling hopes for a diplomatic breakthrough before the end of the two-week ceasefire. The extension to the halt in fighting has breathed life back into market participants, with the spotlight now turning to the earnings season.
Analysts have begun to suggest that, with assets like stocks and the dollar now broadly trading around pre-war levels, markets may be starting to believe that the peak of the geopolitical strife in the Middle East has passed.
“While there is still uncertainty and saber rattling over the Iran conflict, markets are forward looking and currently looking past the conflict,” Rick Gardner, chief investment officer at RGA Investments, said.
“It’s possible that we see a continuation of negative headlines, ultimatums and deadlines for negotiations, but that doesn’t mean that stocks will react meaningfully to each one, since markets already priced-in the worst of the conflict during the lows made back in March,” he said.
“The combination of improving Iran headlines, investor exhaustion over the volatility in March and a strong start to earnings season has helped to propel stocks to record highs. Once stocks reach new highs after a correction, like the one in March, the upward trend can last for some time, as corrections reset sentiment which allows stocks to climb higher,” Gardner added.
Stock Movers
Turning to earnings-related moves, traders were on the lookout for any signs that the Iran war was impacting corporate returns.
United Airlines slipped 6.6%, after the carrier posted underwhelming second-quarter and annual profits.
Analysts cited by Reuters said although United’s weaker guidance was due largely to an uptick in fuel costs, its underlying performance, removing these expenses, was mostly in line with expectations.
Higher jet fuel prices stemming from the war have threatened to hit margins across the airline industry, even as travel demand has appeared to be robust.
Elsewhere, GE Vernova soared more than 12% and was among the top percentage gainers on the S&P 500, following an improved annual revenue forecast from the power equipment manufacturer.
Shares of telecom major AT&T reversed premarket gains to trade about 2% lower, despite better-than-expected wireless subscriber additions in the first quarter.
Planemaker Boeing rose 2.7% after the group posted a quarterly loss that was smaller than estimated.
After markets close, earnings from Elon Musk’s electric vehicle maker Tesla will be in the spotlight. The company’s shares were around 1% higher.
