U.S. stocks continued to climb on Thursday afternoon, with the Nasdaq and S&P 500 indices extending their gains after hitting record highs in the previous session. Former President Donald Trump stated that Lebanon and Israel have agreed to a 10-day ceasefire. As tensions in the Middle East showed signs of easing, optimism surrounding artificial intelligence trades and corporate earnings reports provided support for the stock indices.
The Dow Jones Industrial Average rose by 65.92 points, or 0.14%, to 48,529.64. The Nasdaq Composite increased by 40.70 points, or 0.17%, to 24,056.71. The S&P 500 gained 7.51 points, or 0.11%, to 7,030.46.
During Thursday's afternoon session, the S&P 500 briefly reached 7,051.23, while the Nasdaq climbed as high as 24,156.18, both setting new intraday all-time highs.
Both the S&P 500 and the technology-heavy Nasdaq reached key milestones in the previous trading session: the former closed above the 7,000 mark for the first time, while the latter finished above 24,000 for the first time.
Stocks advanced on Thursday following news that former President Donald Trump confirmed he had spoken with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu. Trump also stated that Israel and Lebanon agreed to a 10-day ceasefire starting at 5 p.m. Eastern Time on Thursday.
The Speaker of Iran's Parliament had previously indicated that Israel halting its attacks on Lebanon was a key condition for initiating negotiations regarding the Iran conflict.
In pre-recorded remarks aired on Wednesday, Trump said the Iran war was "very close to ending" and reiterated his claim that Tehran was "very eager to reach a deal."
Regarding discussions between Washington and Tehran, a second round of talks is under consideration, but no formal agenda has been scheduled yet, according to a White House official who requested anonymity to discuss internal planning.
Stocks have recently risen on hopes of a final peace agreement between the U.S. and Iran. The S&P 500 had already erased all losses incurred since the outbreak of the Iran war earlier this week.
On Wednesday, both the S&P 500 and Nasdaq achieved significant milestones: the former closed above 7,000 for the first time, while the latter closed above 24,000 for the first time. This also marked the Nasdaq's 11th consecutive day of gains—its longest winning streak since November 8, 2021.
However, even if a U.S.-Iran peace deal is reached in the short term as investors anticipate, market volatility may still occur due to the potential economic impact of the war.
Rob Williams, Chief Investment Strategist at Sage Advisory, stated, "We will have to go through a couple of quarters of subpar GDP performance. People have largely been waiting for the Iran issue to resolve itself, which would be a major positive factor, but the economic growth rate remains only 2%. We might experience a few quarters below 2% here."
"I don't know if the market is prepared for that," he added.
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