S&P 500, Nasdaq edge up from records with Middle East hopes, corporate earnings in focus

The benchmark S&P 500 and the tech-heavy Nasdaq edged higher on Thursday after record finishes in the prior session as a ceasefire agreement between Israel and Lebanon added to optimism that the worst of the Middle East conflict had passed, while investors also digested a mixed bag of economic data and earnings reports. Trading on Wall Street was choppy even after U.S. President Donald Trump said Israel and Lebanon had agreed ‌to a 10-day ceasefire, potentially ⁠removing an ⁠obstacle to a broader peace agreement in the region. Both Nasdaq and the S&P 500 had rebounded sharply on hopes for peace after steep declines in March due to the Middle East war, which has killed thousands of people.

"The war is still the single most important driver of the market. It would be very unusual for us to break through to new all-time highs like we did yesterday and not stall here and probably go back and retest," said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas. "The rubber band was very stretched to the downside. It has snapped back and is no longer stretched to the downside. That rebound rally is probably over and now ⁠the market ‌needs to start trading on its own fundamentals."

MIXED ECONOMIC TRENDS While hopes of diplomatic progress have lifted sentiment this week, some say clearer signals of peace may be needed to sustain momentum. Phipps also pointed to a mixed bag of economic ⁠data on Thursday. New applications for U.S. unemployment benefits fell more than expected last week, suggesting labor market conditions remained stable, though employers are cautious about increasing headcount as the war with Iran weighs on the economy.


"It is difficult to discern why investors are so optimistic," said Melissa Brown, managing director of investment decision research at SimCorp.

"The economic data does not really justify the high degree of enthusiasm."

At 2:21 p.m. ET (1821 GMT), the Dow Jones Industrial Average rose 107.27 points, or 0.22%, to 48,570.99, the S&P 500 gained 6.28 points, or 0.09%, to 7,029.41 and the Nasdaq Composite added 18.01 points, or 0.08%, to 24,034.03. The S&P and Nasdaq touched intraday highs.

RESULTS STEER SENTIMENT

Market moves could also become more idiosyncratic as the corporate earnings season gathers pace. U.S. beverages ‌company PepsiCo gained 1.7% after beating quarterly profit estimates. Medical device maker Abbott declined 6%, hitting its lowest level since November 2023 after cutting its full-year profit forecast, while brokerage Charles Schwab fell 6% after releasing results.

Netflix is due to report after markets close. Its shares were 0.4% higher.

Software stocks and ⁠energy shares were up about 1.5%.

Big movers included Myseum, which was up about 150% to $3.60 after rebranding as Myseum.AI. The rally followed even more dramatic gains in sneaker maker Allbirds on Wednesday after it said it was pivoting to AI.

Voyager Technologies rose 6.6% after NASA signed an order for the company to conduct the seventh private astronaut mission to the International Space Station, the company's first selection for such a mission.

Advancing issues outnumbered decliners by a 1.13-to-1 ratio on the NYSE, where there were 251 new highs and 34 new lows. On the Nasdaq, 2,278 stocks rose and 2,417 fell as declining issues outnumbered advancers by a 1.06-to-1 ratio.

The S&P 500 posted 20 new 52-week highs and one new low while the Nasdaq Composite recorded 110 new highs and 36 new lows.