US stocks closed higher on Thursday, May 22, with the Dow Jones Industrial Average reaching a new all-time closing high. The earlier gains in oil prices and US Treasury yields reversed, as traders held out hope for a resolution to Middle East tensions.
The Dow Jones rose 276.31 points, or 0.55%, to 50,285.66. The Nasdaq Composite added 22.74 points, or 0.09%, to 26,293.10, while the S&P 500 gained 12.75 points, or 0.17%, to 7,445.72. All three major indices advanced as oil prices relinquished their earlier increases. West Texas Intermediate crude futures were last down 2%, trading around $96 per barrel. Brent crude also fell 2%, to approximately $102 per barrel. Earlier reports that Iran's Supreme Leader had ordered the country's enriched uranium to be kept within its borders initially caused a spike in oil prices, adding further complexity to the prospects of resolving US-Iran tensions. The initial surge in oil prices subsequently pushed US Treasury yields higher, as traders grew concerned about rising inflation. However, the benchmark 10-year US Treasury yield and the 30-year yield later turned lower, falling by more than 1 basis point to 4.556% and over 2 basis points to 5.09%, respectively. On Wednesday, stocks rose as oil prices and bond yields retreated, ending a three-day losing streak for the S&P 500. Investor sentiment was buoyed by a report quoting the US President stating that negotiations with Iran had entered a "final stage." Robert Conzo, CEO of The Wealth Alliance, commented, "If inflation re-emerges because oil stays at $100 or above, which could happen, then there might be short-term worries around that; you'll hear a lot of headline risk." He noted, however, that the current CBOE Volatility Index level of around 17 suggests investors are "feeling pretty comfortable," given the proliferation of artificial intelligence, strong corporate earnings, and low unemployment. He added, "Everyone is watching to see if a deal can be reached." On Thursday, traders also digested the latest quarterly earnings report from NVIDIA. The company comfortably surpassed Wall Street expectations for both profit and guidance and also announced an increase in its quarterly cash dividend to 25 cents. However, investors have grown accustomed to seeing the chipmaker exceed expectations and raise its outlook amid the AI boom. NVIDIA's stock was last down nearly 1%. Conzo remarked, "People will say 'we want more.' They just want more, to the point where more becomes unrealistic."
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