U.S. equities continued to advance during Tuesday's midday trading, with the Nasdaq Composite reaching a new intraday record high. The Dow Jones Industrial Average gained 200 points as traders monitored a series of robust corporate earnings reports. Crude oil prices declined across the board, with West Texas Intermediate crude falling more than 4%.
The Dow rose by 254.85 points, or 0.52%, to 49,196.75. The Nasdaq increased by 237.13 points, or 0.95%, to 25,304.93, while the S&P 500 climbed 55.39 points, or 0.77%, to 7,256.14. Earlier in the session, the Nasdaq reached a peak of 25,335.40, setting a new intraday high.
The decline in oil prices provided support for stock indices. West Texas Intermediate crude futures dropped 4.2%, falling below the $102 per barrel level. Brent crude futures decreased by 1% but remained above $112 per barrel.
A ceasefire between the United States and Iran remained fragile following new attacks on vessels in the Strait of Hormuz. However, U.S. Secretary of Defense Pete Hegseth stated on Tuesday that "two U.S. commercial ships, along with a U.S. destroyer, have safely transited the strait, indicating that the passageway remains open." Earlier, former U.S. President Donald Trump had indicated that the U.S. would "guide" stranded vessels through the strait.
Another round of better-than-expected quarterly earnings also contributed to the market's upward momentum. Notably, Pfizer reported first-quarter profit and revenue that exceeded expectations and reaffirmed its full-year outlook. Shares of Anheuser-Busch InBev, the Belgian brewer listed in the U.S., rose 6% after releasing optimistic quarterly results.
An exception was Palantir Technologies, whose shares fell 2% despite the company reporting first-quarter results that surpassed analyst expectations, with revenue growing at the fastest pace since its 2020 public listing. The firm also raised its full-year guidance.
Stocks had declined on Monday after the United Arab Emirates announced that Iran had launched drone and missile attacks, further destabilizing an already fragile ceasefire between the U.S. and Iran.
Reports indicated that U.S. forces had sunk Iranian vessels in the Strait of Hormuz. U.S. Central Command General Brad Cooper confirmed in a press briefing on Monday afternoon that U.S. Army AH-64 Apache helicopters and U.S. Navy MH-60 Seahawk helicopters had jointly engaged and sunk six Iranian small attack boats that threatened commercial shipping. This marked the first publicly confirmed direct engagement since former President Trump announced "Project Freedom" on May 3, a plan for U.S. military forces to escort commercial vessels through the strait. Iranian state media denied the reports of sunken vessels.
News of the direct confrontation had driven oil prices higher on Monday, pressuring equity markets.
Despite escalating Middle East tensions and Monday's market decline, Adam Crisafulli of Vital Knowledge expressed reasons for optimism, stating, "We continue to believe that Trump remains eager to avoid military escalation and is seeking to steer the situation toward a negotiated agreement."
On the economic data front, the U.S. trade deficit widened on a monthly basis in March but was 55% lower compared to the same period a year before the implementation of Trump-era import tariffs. The Commerce Department reported a total goods and services trade deficit of $60.3 billion for the month, an increase of $2.5 billion from February but slightly below the Dow Jones estimate of $60.9 billion. Annually, the trade deficit decreased by $211.2 billion compared to the previous year. Exports rose by 12%, while imports fell by 9.1%. This was the final monthly report before the April 2025 "Liberation Day" tax policies took effect.
U.S. job openings edged down slightly to 6.866 million in March, while hiring activity showed significant improvement. The Job Openings and Labor Turnover Survey (JOLTS) report from the Labor Department indicated that the number of job openings was largely unchanged from February's 6.922 million and slightly above market expectations of 6.835 million. The job openings rate dipped from 4.2% to 4.1%.
Although the number of job openings saw little change, hiring activity rebounded notably. The report showed that hires increased substantially by 655,000 to 5.554 million in March, with the hiring rate jumping from 3.1% in February to 3.5%. This suggests that businesses displayed a stronger willingness to hire after a sluggish start to the year.
Meanwhile, layoffs increased by 153,000 to 1.867 million, with the layoff rate rising slightly from 1.1% to 1.2%. Overall, the labor market remained in a balanced state characterized by low hiring and low layoff rates.
Analysts noted that the improvement in the March employment market was largely driven by continued expansion in the healthcare sector and a technical rebound as adverse weather and strike-related disruptions faded. However, rising energy prices due to Middle East tensions could pose a potential constraint on future hiring. Markets will closely monitor Friday's release of the April non-farm payrolls report for further insight into labor market trends.
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