(April 23) : Stocks climbed to all-time highs as a slew of strong corporate results and President Donald Trump’s extension of a ceasefire with Iran revived risk appetites after a two-day retreat. Bitcoin rallied.
The S&P 500’s 1% gain extended its advance for the month, set to be the best since 2020. Chipmakers climbed for a 16th straight day, the longest-ever winning streak. Boeing Co. surged on solid first-quarter deliveries. In late hours, Tesla Inc. jumped as earnings beat estimates. Texas Instruments Inc. gave a strong forecast for the current period.
“Stocks are rebounding after suffering the first back-to-back losses of the month, with President Trump’s ceasefire extension and upbeat earnings reports driving continued equity upside,” said Jose Torres at Interactive Brokers.
Trump’s ceasefire extension represented a retreat from threats to resume the bombing of Iran in the event a deal couldn’t be reached by a Wednesday deadline, a move that would have revived a war that’s killed thousands of people and sent energy prices soaring.
The question now is whether the two sides can reach an agreement. Tensions remain high as Tehran keeps a tight grip on the Strait of Hormuz, controlling passage through the trade route and firing on ships. The US refuses to lift its blockade on Iranian-linked vessels. Brent oil settled near US$102.
The situation is “calm and chaotic” at the same time, according to Kenny Polcari at SlateStone Wealth.
See also: US futures gain, oil falls on signs of Iran talks
“While the Iran conflict is ongoing, my sense is that investors are already starting to look through it and focus on what really matters,” he said. “We’ve seen this movie before — the headlines hit, the market reacts, then it settles down and refocuses on fundamentals.”
Strong corporate profits, the revival of the artificial-intelligence trade and an otherwise resilient economy have buoyed stocks despite lingering geopolitical risks. Nearly 80% of the S&P 500 companies reporting first-quarter results have beaten analyst earnings estimates so far, according to data compiled by Bloomberg.
While there is still uncertainty and saber rattling over the Iran conflict, markets are forward-looking, noted Rick Gardner at RGA Investments.
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“It’s possible that we see a continuation of negative headlines, ultimatums and deadlines for negotiations, but that doesn’t mean that stocks will react meaningfully to each one, since markets already priced-in the worst of the conflict,” he said.
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