The S&P 500 closed at 6,967.38 on Tuesday, a gain of 81.14 points, and sits just 0.2 per cent below the record it set in January. The index added 1.2 per cent on top of the previous day’s leap.
Hope was the driver. Diplomats were working through back channels to set up a new round of talks between the United States and Iran, and investors bet the war could end without lasting damage to the world economy. The Dow Jones Industrial Average gained 317.74 to 48,535.99, a rise of 0.7 per cent. The Nasdaq composite climbed 455.35, or 2 per cent, to 23,639.08.
Oil gives some ground
Brent crude for June delivery fell 4.6 per cent to settle at US$94.79 a barrel. That is still well above the roughly US$70 it fetched before the war began in late February. It is also far below the US$119 peak reached when worries were at their worst.
The Strait of Hormuz is the sore point. Crude from the Persian Gulf area mostly leaves by that narrow waterway, and blockages have kept oil off the market and pushed prices up. Treasury yields eased as oil slipped. The 10-year yield fell to 4.25 per cent from 4.30 per cent late Monday.
Inflation is already feeling it. Wholesale inflation in the United States accelerated to 4 per cent in March from 3.4 per cent in February, though economists had expected 4.6 per cent. The International Monetary Fund now expects global inflation to reach 4.4 per cent this year, up from 4.1 per cent in 2025; it had earlier forecast a slowdown to 3.8 per cent. It also cut its global growth forecast to 3.1 per cent from the 3.3 per cent it projected in January.
Hope has often turned to doubt quickly since the war began, causing extreme and sudden reversals in markets.
Earnings and deals
Corporate profits are cushioning the worry. FactSet analysts forecast growth of more than 12 per cent for S&P 500 companies in the latest quarter, and Morgan Stanley strategists say analysts have raised their profit estimates for the first half of the year since the war began.
BlackRock rose 3 per cent and Citigroup 2.6 per cent after stronger-than-expected results. JPMorgan Chase also beat expectations but slipped 0.8 per cent after CEO Jamie Dimon said officials cannot predict how an “increasingly complex set of risks” will play out. Wells Fargo dropped 5.7 per cent on weaker revenue than analysts had forecast.
Amazon gained 3.8 per cent after saying it would buy Globalstar, a mobile satellite services company, for US$90 per share in cash or Amazon stock. Globalstar jumped 9.6 per cent.
Software stocks rallied for a second day as they recovered from steep losses tied to fears of artificial-intelligence disruption. AppLovin rose 3.9 per cent. Private-credit lenders to software firms bounced too: Blue Owl Capital rose 8.5 per cent, Ares Management 5.6 per cent and Apollo Global Management 4.4 per cent.
Abroad, South Korea’s Kospi jumped 2.7 per cent and Japan’s Nikkei 225 rose 2.4 per cent.
