Highlights
Stocks extended Tuesday's rally on Wednesday amid rising hopes for a resumption of peace talks in the US-Iran war. The Dow Jones industrial average gained 1.4 percent, the S&P 500 rose 1.5 percent, and the Nasdaq was up 2.0 percent. Oil prices, the dollar, and bond yields all declined.
More reports suggesting Iran is weighing a US settlement proposal spurred a big selloff in oil prices early in the day though other threatening comments from President Trump pushed prices back up from the lows. Concern remains that the Iranian side is not likely to accept the US offer and that hopes for a settlement have been overblown.
Markets did not react strongly to news from ADP that payrolls rose more than expected in April from March. That added to perceptions that the economy has been more resilient than most expected during the Iran war.
Technology shares led the rally with investors continuing to bid up chipmakers and other shares linked to the AI trade. AMD was a big winner after posting strong quarterly results and Intel added to Tuesday's huge gains.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.