The Standard & Poor's 500 and the Nasdaq set fresh record highs on expectations that the ceasefire would hold, despite the U.S. "Project Freedom" operation and reports of an Iranian attack on the United Arab Emirates (UAE).
On Thursday, the S&P 500 closed at 7,259.22 on the New York Stock Exchange, up 0.81%, while the Nasdaq ended at 25,326.13, up 1.03%. The Dow Jones Industrial Average closed at 49,298.34, up 0.73%. While some observers warned that the U.S. Project Freedom operation could prompt Iranian retaliation and break the ceasefire, U.S. Defense Secretary Pete Hegseth said at a press conference that "the ceasefire with Iran has not collapsed," signaling no immediate intent to strike Iran.
"The lack of further escalation in tensions with Iran is supporting investor sentiment," said Brock Weimer of Edward Jones. Chris Senyek of Wolfe Research said, "Our base-case scenario is that the conflict between the U.S. and Iran will be resolved in the short term, reopening the Strait of Hormuz and bringing energy prices lower."
Technology and artificial intelligence (AI)-related stocks also rose. Apple shares gained 2.66%, Alphabet rose 1.35%, and Amazon climbed 0.55%. Intel surged 14% to a record high after Bloomberg reported that the company is in talks with Apple over chip production for products including the iPhone. The Philadelphia Semiconductor Index also jumped 4.23% to break through its all-time high. The index has risen 55% year-to-date.
Better-than-expected earnings from other companies also boosted the broader market. According to FactSet data, about 85% of S&P 500 companies that have reported so far have exceeded market expectations for quarterly earnings. "We've seen remarkable results not only from mega-cap technology stocks but across the S&P 500 and even among small- and mid-cap U.S. companies," said Zachary Hill of Horizon Investments. "The market is paying little attention to the Strait of Hormuz," he said. "For the market to refocus on the war, there would need to be a significant change in the situation on the ground or a sharp spike in oil prices."
On the ICE Futures Exchange, July Brent crude futures settled at $109.87 per barrel, down 3.99% from the previous session. On the New York Mercantile Exchange, June West Texas Intermediate (WTI) crude futures closed at $102.27 per barrel, down 3.90%.
