S&P 500, Nasdaq edge up to new records with Middle East hopes in focus

April 16 (Reuters) – The benchmark S&P 500 and the tech-heavy Nasdaq rose modestly to record closing highs for a second straight day on Thursday on optimism that the worst of the Middle East conflict had passed after Israel agreed to a temporary ceasefire with Lebanon and U.S. President Donald Trump indicated the U.S. and Iran could meet again on the weekend.

Trading was choppy, however, after Trump announced the 10-day ceasefire between Israel and Lebanon and told reporters Iran had offered not to have nuclear weapons for more than 20 years. Earlier in the day, Bloomberg cited Gulf and European officials saying the U.S. needs about six months to reach an Iran deal.

“You’ve got markets fluctuating between more positive and slightly neutral headlines,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management, in Charlotte, North Carolina, noting that for the last month and a half, “trading has all been about the Iran war.”

MIXED ECONOMIC TRENDS

While hopes of diplomatic progress have lifted sentiment this week, some strategists have said that clearer signals of peace may be needed to sustain momentum. Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas, 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.

“The war is still the single most important driver of the market,” said Phipps. “The rubber band was very stretched to the downside. It has snapped back and is no longer stretched to the downside … Now the market needs to start trading on its own fundamentals.”

According to preliminary data, the S&P 500 gained 16.63 points, or 0.24%, to end at 7,040.09 points, while the Nasdaq Composite gained 80.98 points, or 0.34%, to 24,097.00. The Dow Jones Industrial Average rose 101.37 points, or 0.21%, to 48,565.09.

The Nasdaq and the S&P 500 touched intraday records. Nasdaq’s gain represented its 12th consecutive advance, its longest winning streak since July 2009.

RESULTS STEER SENTIMENT

Market moves could become more idiosyncratic as the corporate earnings season gathers pace.

U.S. beverages company PepsiCo gained after beating quarterly profit estimates.

Medical device maker Abbott declined and hit its lowest level since November 2023 after cutting its full-year profit forecast, while brokerage Charles Schwab also fell after releasing results.

Netflix is due to report after markets close.

Big movers included Myseum after it rebranded 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 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.

(Reporting by Sinéad Carew in New York, Noel Randewich in San Francisco, Niket Nishant and Avinash P in Bengaluru; Additional reporting by Saqib Ahmed in New York; Editing by Tasim Zahid, Rod Nickel)