Wall Street ended higher on Wednesday, extending a two-day rally as investors grew increasingly optimistic that the US-Iran conflict could be nearing an end.
Gains were led by technology heavyweights, while oil prices declined sharply, reflecting easing concerns over supply disruptions.
The S&P 500 rose 0.72%, while the Nasdaq Composite climbed 1.17%. The Dow Jones Industrial Average added 226.66 points, or 0.49%.
Tech stocks lead as risk sentiment improves
Technology-related megacaps were among the biggest drivers of the rally. Shares of Alphabet, Meta Platforms, and Amazon all moved higher, helping lift the broader market.
Chip stocks also gained ground, with the PHLX Semiconductor Index rising for a second consecutive session, as investor appetite for growth stocks strengthened alongside improving risk sentiment.
The rally came as markets responded to comments from Donald Trump, who suggested the United States could be “out of Iran pretty quickly” and may return only for targeted “spot hits” if necessary.
“We have Trump’s comments, which tend to change a bit,” said Thomas Martin, senior portfolio manager at Globalt Investments. “Everybody’s trying to guess as to what he really means by what he’s saying. The markets want it to be positive, they want the war to be over.”
Oil prices slide as war concerns ease
Oil prices fell sharply as hopes for de-escalation reduced fears of supply disruptions through the Strait of Hormuz, a key global oil transit route.
West Texas Intermediate crude settled down 1.24% at $100.12 per barrel, while Brent crude dropped 2.7% to $101.16.
The decline weighed on energy stocks, with the S&P 500 energy index falling nearly 5% at its session low.
Airline stocks, which typically benefit from lower fuel costs, moved higher during the session.
“The market is kind of just sniffing out that there’s probably some type of resolution in the next couple of weeks,” said Patrick Ryan, chief investment strategist at Madison Investments.
Despite the optimism, some investors remain cautious. Ryan noted that unless there is “some type of all-clear announcement,” trading is likely to “remain volatile” in the near term.
Corporate and economic signals in focus
Beyond geopolitics, several corporate and economic developments influenced market activity.
Shares of Eli Lilly rose after the US Food and Drug Administration approved its weight-loss drug, while Intel surged following plans to buy back a stake in its Ireland factory for $14.2 billion.
In contrast, Nike fell to its lowest level in a decade after forecasting a surprise drop in fourth-quarter sales.
Meanwhile, reports that SpaceX had confidentially filed for an initial public offering boosted sentiment in space-related stocks.
On the economic front, data showed steady gains in private payrolls and a pickup in manufacturing activity, while retail sales recorded their strongest increase in seven months in February.
However, traders now increasingly expect the Federal Reserve to raise interest rates by year-end amid persistent inflation concerns.
Investors are now turning their attention to the upcoming nonfarm payrolls report, due Friday, though US markets will be closed for Good Friday.
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