U.S. stock indices closed significantly higher, with the Nasdaq Composite achieving its tenth consecutive day of gains. The positive momentum was fueled by renewed expectations of U.S.-Iran negotiations.
On April 14, Eastern Time, all three major U.S. stock indices recorded substantial gains. At the close, the Nasdaq Composite surged by 1.96%, marking its tenth straight day of increases and setting its longest winning streak since 2021. The S&P 500 rose by 1.18%, while the Dow Jones Industrial Average advanced by 0.66%.
Large-cap technology stocks experienced a collective upswing. Meta Platforms, Inc. jumped over 4%. NVIDIA, Alphabet, Amazon.com, and Tesla Motors all climbed more than 3%. Microsoft and TSMC's ADRs also saw gains exceeding 2%. Apple closed with a slight decline.
The AI data center and semiconductor sectors continued their strong performance, with several companies, including optical communications firm Coherent, KLA, Lam Research, and liquid cooling specialist Vertiv, reaching new all-time highs.
Chinese assets also rallied broadly. The Nasdaq Golden Dragon China Index closed up 2.35%. The 2x Leveraged Long China Internet ETF surged over 4%, while the 3x Leveraged Long FTSE China ETF and the 2x Leveraged Long CSI 300 ETF both gained more than 3%.
Popular U.S.-listed Chinese stocks generally advanced. iQiyi soared over 11%, JD.com jumped more than 7%, Kingsoft Cloud increased over 6%, and Baidu rose more than 5%. Futu Holdings, TAL Education Group, and Tencent Music each gained over 3%. Alibaba, Bilibili, and XPeng Motors were up more than 2%.
Influenced by news of potential U.S.-Iran talks, international oil prices fell sharply. On Tuesday, U.S. WTI crude futures settled down 7.87% at $91.28 per barrel, while Brent crude futures dropped 4.6% to $94.79 per barrel.
Goldman Sachs strategist Chris Hussey noted that the S&P 500's year-to-date return has turned positive, an outcome that seemed highly unlikely just a week ago. He suggested that as a forward-looking mechanism, the stock market often reacts before a "problem that will eventually be solved" is fully resolved, partly explaining the current market behavior.
Bloomberg strategist Cameron Crise pointed out that although the S&P 500 is approaching its historical peak, its valuation appears more resilient compared to the start of the year. The index's forward P/E ratio is approximately 8% lower than its January level, indicating that the price increase has not been accompanied by a parallel expansion in valuation bubbles.
Cameron Crise further explained that the recent upward revisions in earnings per share (EPS) forecasts are not primarily driven by traditional energy sectors but are largely fueled by the semiconductor industry. Due to strong growth expectations for chips, profit forecasts for this sector surged about 10% within just three days, becoming a key variable supporting market fundamentals and offsetting stock price premiums.
Regarding negotiation developments, reports on April 15 indicated that former President Trump suggested U.S.-Iran talks might resume in Pakistan within the next two days. Separately, Lebanon, Israel, and the United States held trilateral talks in Washington, agreeing to formally commence direct negotiations between Lebanon and Israel at a time and place mutually agreed upon.
Trump commented that Pakistan's Army Chief General Munir had performed excellently in the talks, increasing the likelihood of returning to the negotiating table. The UN Secretary-General also stated that a resumption of U.S.-Iran negotiations is highly probable, while cautioning that resolving such a complex, long-standing issue in a single meeting is unrealistic, emphasizing the need for continued talks and a sustained ceasefire.
Media reports cited sources suggesting negotiations could restart as early as this weekend, with discussions ongoing about extending the current temporary ceasefire set to expire on April 22. Concurrently, Lebanon-Israel-U.S. trilateral talks were described as the first significant high-level contact between the Lebanese and Israeli governments since 1993, aimed at establishing a framework for future direct negotiations.
A U.S. State Department statement indicated Israeli support for disarming Hezbollah in Lebanon, with a commitment to cooperate with the Lebanese government. The U.S. emphasized that any ceasefire agreement must be reached directly between the two governments, mediated by the U.S., and not through other channels.
Analyses noted that Iran seeks to include Lebanon in any ceasefire deal with the U.S., a proposition supported by mediator Pakistan but rejected by Israel and the U.S. Some reports suggested Israel's agreement to negotiate with Lebanon might be a tactic to buy time for military operations against Hezbollah while demonstrating cooperation to the United States.
