S&P 500 Hits Record High as Markets See Hope for Ceasefire Extension

Christopher Smart, founder and managing partner at Arbroath Group, said that investors are finding it hard to readjust and price global geopolitical change into their market moves, as the S&P 500 hits a new all-time high amid war with Iran. Smart also discussed the global economic conversation happening at the IMF spring meetings in DC. Smart said that the big headline from the IMF conference is that economists are warning that while global economic growth has continued to slow, inflationary pressures are also not going down.

Stocks extended their gains, pushing the S&P 500 Index to a record high, as investors piled into equities on optimism over the ceasefire between the US and Iran and robust corporate earnings.

The S&P 500 climbed 0.5% to hit a new intraday high, driving it above the previous peak of 7,002.28 points in late January, with the finance and technology sectors leading the advance. The Nasdaq 100 rose as much as 0.9%.

The rally continues what has been a stark turnaround for the stock market, where a selloff through the end of last month had pushed the S&P 500 more than 9% below its peak. That downturn erupted after the oil-price spike unleashed by Iran war threatened to slow growth and fan inflation — raising fears of 1970s-like stagflation.

But signs of easing tensions in the Middle East, combined with optimism over artificial-intelligence technology and corporate earnings, have pushed skeptics to abandon their cautious views.

“It’s difficult for investors to avoid the fear of missing out,” said Matt Maley, chief market strategist at Miller Tabak + Co. “It reinforces the whole buy-the-dip mentality that has worked so well the last few years.”

Investors have piled into stocks on hopes over another round of talks between the US and Iran. The two are closer to extending a ceasefire and restarting negotiations about a longer-term peace deal, the Associated Press reported on Wednesday, even as a standoff intensifies over the Strait of Hormuz. US stocks closed at record highs on Wednesday, as a potential peace deal in the Middle East and a strong start to corporate earnings season stoked investor optimism.

The S&P 500 finished the day up 0.8%, extending a dramatic two-week surge from its late March lows. The tech-heavy Nasdaq 100 was up 1.4%, also a record. Bank of America Corp. and Morgan Stanley rose as their equity traders posted strong revenue beats.

Hopes that peace efforts between the US and Iran will succeed have pushed investors to increasingly price out the risk premium built up since the conflict started in late February and renew their focus on artificial intelligence and Corporate America’s resilience.

The warring sides are considering a two-week ceasefire extension to allow more time to negotiate a peace deal, according to a person familiar with the matter, reducing the prospect of a return to fighting despite an intensifying standoff over the Strait of Hormuz.

Read more: US, Iran Weigh Truce Extension With Hormuz Still Shuttered

“Stocks are basically expressing their view that the war in the Persian Gulf is all but over,” wrote Steve Sosnick, chief strategist at Interactive Brokers LLC.

Brent rose 0.1% toward $95 a barrel as the US pressed ahead with a naval blockade of the Strait of Hormuz. Treasuries slipped, with the two-year yield rising to 3.76%. The dollar was lower while gold fell toward $4,800 an ounce.

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