U.S. stocks erased earlier declines and closed slightly higher, driven by investor optimism that diplomatic efforts could bring an end to the Middle East conflict.
As a volatile trading day on Wall Street neared its close, markets found some reassurance after Pakistan urged the United States to extend a deadline by two weeks and called on Tehran to reopen the Strait of Hormuz during that period. The S&P 500 reversed a 1.2% drop to finish 0.1% higher; the Nasdaq 100 was nearly unchanged, while U.S. crude oil declined in post-settlement trading.
In individual movers, Broadcom shares closed up 6.21% after the chipmaker announced a long-term agreement with Google to jointly develop and supply tensor processing units (TPUs).
Meanwhile, a major fire broke out at a Kimberly-Clark distribution center in Ontario, California. Piper Sandler analyst Michael Lavery suggested the incident would introduce "uncertainty" into the company's operations and could cause "disruption." Shares of Kimberly-Clark fell 4.06% as a result.
Apple shares closed down about 2.1%, though losses narrowed following a Bloomberg report indicating the company's foldable iPhone is still expected to launch in September.
Pakistani Prime Minister Shehbaz Sharif posted on X that "diplomatic efforts for a peaceful resolution to the ongoing Middle East war are steadily advancing." Reuters correspondent Parisa Hafezi, also on X, cited a senior Iranian official stating that Tehran was "actively evaluating" Pakistan's proposal.
According to a person familiar with the matter, mediators are racing to keep negotiation channels open after Iran halted its participation in ceasefire talks. The source, who spoke on condition of anonymity due to the private nature of the discussions, added that some communication between the sides is occurring through third-party channels.
While geopolitical risks remain a central focus, traders are also closely watching the latest economic data for clues about any potential impact from the conflict.
A survey released Tuesday by the New York Fed showed short-term inflation expectations rose in March at the fastest pace in a year, with consumers anticipating that the Middle East war would drive up gasoline and food prices.
New York Fed President John Williams said that although he expects rising energy costs due to the conflict to boost overall inflation, his view on underlying price pressures remains largely unchanged.
Chicago Fed President Austan Goolsbee expressed concern about the U.S. economy, citing the combination of surging oil prices and low levels of corporate hiring.
"I'm cautious, even a little nervous," he said during an event in Detroit.
At the close, the S&P 500 was up 0.1% at 6,616.84.
The Dow Jones Industrial Average fell 0.2% to 46,584.46.
The Nasdaq Composite rose 0.1% to 22,017.85.
Comments