U.S. stocks advanced during Wednesday's early session, with the Nasdaq and S&P 500 indices nearing their all-time peaks. The market received a boost after the U.S. President extended a ceasefire agreement with Iran, coupled with a series of corporate earnings reports that surpassed expectations.
The Dow Jones Industrial Average rose by 457.02 points, or 0.93%, to 49,606.40. The Nasdaq Composite increased by 237.46 points, or 0.98%, reaching 24,497.43. The S&P 500 gained 58.07 points, or 0.82%, closing the early session at 7,122.08.
Shortly after Tuesday's market close, the U.S. President prolonged the two-week ceasefire period with Iran, justifying the decision by citing significant divisions within Tehran's government.
In a post on Truth Social, the President stated: "Given the fact that the Iranian government is severely divided—which is no surprise—we were asked, at the request of Pakistan's Army Chief General Asim Munir and Prime Minister Shehbaz Sharif, to hold off on any attack against Iran until the country's leaders and representatives can present a unified proposal."
The President added: "Accordingly, I have directed the military to maintain the blockade and remain prepared in all other respects, thus the ceasefire will be extended until their proposal is submitted and discussions conclude, regardless of the outcome."
The timeline for the U.S.-Iran ceasefire remains uncertain. Citing a U.S. source, media reported on the 22nd that the U.S. President is willing to grant Iran an additional 3 to 5 days of ceasefire, but emphasized that "this will not be indefinite."
Previously, reports from outlets such as Axios, citing informed U.S. officials, indicated that a planned trip by the U.S. Vice President to participate in peace talks had been suspended due to a lack of commitment from Tehran.
Iranian state media reported on Wednesday that Tehran's negotiators declared they would not attend, describing talks with the U.S. as a "waste of time." Even after the ceasefire extension, the Iranian navy announced on Wednesday that it had seized two container ships in the Strait of Hormuz, indicating that tensions persist in the critical waterway.
Beyond the ceasefire announcement, a strong start to the earnings season has also bolstered market sentiment.
On Wednesday, Boeing reported a smaller-than-expected first-quarter loss, with its stock price climbing over 3%. According to FactSet data, more than 80% of the S&P 500 companies that have reported earnings so far have exceeded expectations.
Last week, as hopes for de-escalation grew, the S&P 500 erased all losses incurred since the outbreak of the conflict. Both the broad market benchmark and the Nasdaq Composite have repeatedly set new intraday and closing records, with the S&P 500 closing above 7,100 for the first time.
Despite ongoing geopolitical uncertainties, Stephanie Aliaga, a Global Market Strategist at J.P. Morgan Asset Management, anticipates the rally will continue, driven by the artificial intelligence boom and productivity gains.
Stephanie Aliaga commented: "The Middle East conflict is clearly not yet resolved, but markets are forward-looking, and the reality is we are still on a de-escalation path. We don't yet know the details and timing—I think that remains a risk for the market, especially one that has priced in a 'calm' scenario so quickly. So there is some volatility. But ultimately, these are bumps in a market that is on an upward trajectory."
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