S&P 500 and the Nasdaq Composite Index posted new highs on strong economic data and solid earnings.
The popular blue-chip Dow Jones Industrial Average could soon hit 50,000 again for the first time since February as U.S. stocks keep shrugging off the war in Iran.
The Dow Jones rose by as much as 500 points, or about 1 percent, to above 49,700 during the May 6 trading session.
It has been a volatile year so far for the index of 30 large, established U.S. companies.
Despite wild market swings, the Dow Jones is up 3.5 percent year to date.
The tech-heavy Nasdaq Composite Index could finish the midweek session at a fresh record high. The Nasdaq advanced about 300 points, or 1.2 percent, to above 25,600.
The broader S&P 500 also firmed more than 60 points, or almost 1 percent, to a new intraday all-time high of above 7,300.
Both indexes have jumped 10 percent and 6 percent, respectively, so far this year.
Investors cheered reports that the United States and Iran were inching toward an agreement to resolve the 10-week-old conflict.
President Donald Trump said on social media that a deal was uncertain.
“Assuming Iran agrees to give what has been agreed to, which is, perhaps, a big assumption, the already legendary Epic Fury will be at an end, and the highly effective blockade will allow the Hormuz Strait to be open to all, including Iran,” Trump said in a May 6 Truth Social post.
“If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before.”
A day earlier, the president paused “Project Freedom,” the U.S. operation to guide stranded commercial vessels out of the Strait of Hormuz, but confirmed that the blockade of Iranian ports would remain intact. The purpose was to finalize an arrangement with Iran.
Prospects of a peace deal sent global energy prices lower.
A barrel of West Texas Intermediate crude oil—the U.S. benchmark for prices—declined nearly 6 percent to below $97 on the New York Mercantile Exchange.
Brent, the international benchmark for oil prices, also fell by about 6 percent to below $103 per barrel in overseas trading.
“Developments in the Middle East will remain key to price direction,” commodity strategists at ING said in a May 6 note.
“A deal that normalises oil flows through the Strait of Hormuz is crucial. Roughly 13 mb/d of disrupted supply is being largely offset by inventory, which is clearly declining rapidly,” they added.
“This leaves the market more vulnerable with each passing day. Tighter stocks will only leave the oil market trading in an ever more volatile manner.”
The sharp midweek drop may help put a temporary lid on surging gasoline prices.
The national average for a gallon of gasoline is nearly $4.54, up 30 cents in a week, according to the American Automobile Association.
By Andrew Moran
