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. Canada’s main stock index ended modestly lower.
Trading was choppy 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.”
While hopes of diplomatic progress have lifted sentiment this week, some strategists have said clearer signals of peace may be needed to sustain momentum. However, in the options market, positioning and market momentum suggested the recent stock market rally has further room to run.
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 labour 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.”
The Dow Jones Industrial Average rose 115.00 points, or 0.24%, to 48,578.72, the S&P 500 gained 18.33 points, or 0.26%, to 7,041.28, and the Nasdaq Composite gained 86.69 points, or 0.36%, to 24,102.70. The Nasdaq and the S&P 500 touched intraday records on Thursday.
Nasdaq’s gain represented its 12th consecutive advance, its longest winning streak since July 2009 after the global financial crisis.
The Toronto Stock Exchange’s S&P/TSX Composite Index ended down 103.76 points, or 0.3%, at 34,052.23, with declines for consumer-related shares offsetting gains for energy and real estate.
On Wednesday, the TSX posted its highest closing level since March 2 on rising hopes of a resolution to the conflict in the Middle East that has disrupted energy supplies globally.
“We do think that the market is overly optimistic at looking through these issues,” said Ben Jang, a portfolio manager at Nicola Wealth.
“The longer the uncertainty with oil - not only will prices continue to stay high but the prolonged conflict creates deeper scars within the marketplace which makes it more difficult for oil prices to come down quickly.”
The price of oil settled 3.7% higher at US$94.69 a barrel.
The TSX consumer staples sector fell 1.4%, with shares of Loblaw Companies Ltd down 1.9% at their lowest closing level since January 7.
Industrials lost 0.8% and heavily weighted financials ended 0.5% lower.
Real estate investment trust Choice Properties and private-equity firm KingSett Capital will acquire First Capital REIT in a cash-and-stock deal worth about C$9.4 billion including debt, the companies said.
“We think that this is a very positive sign for the commercial market place,” Jang said. “We’ve had a really prolonged stretch where rate volatility and repricing of markets have led to compressed deal activity.”
Shares of First Capital climbed 8%, which helped lift the real estate sector by 1.3%.
The energy sector tracked crude prices higher, adding 1%.
On Wall Street, most of the S&P 500’s 11 major sector indexes gained. Healthcare was the biggest loser, finishing down 0.8%, while the biggest gainer was energy, which rose 1.6% as oil prices climbed.
Investors were also reacting to corporate earnings during the first week of the first-quarter reporting season.
U.S. beverages company PepsiCo finished up 2.3% after beating quarterly profit estimates.
Medical device maker Abbott slumped 6% and hit its lowest level since November 2023 after cutting its full-year profit forecast.
The S&P 500’s biggest decline on the day came from brokerage Charles Schwab, which tumbled 7.6% after releasing results.
After finishing the regular session flat, Netflix shares - which trade on the Nasdaq - fell 8% in late trading after it reported quarterly results. The streaming company kept its 2026 revenue forecast unchanged and also announced that co-founder Reed Hastings would exit the company in June.
Big movers included Myseum, which rose 129% to finish at $3.30 after it rebranded as Myseum.AI. Its rally followed even more dramatic gains in sneaker maker Allbirds on Wednesday after it said it was pivoting to AI.
Voyager Technologies rose 8.8% 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.
Advancing issues outnumbered decliners by a 1.23-to-1 ratio on the NYSE, where there were 351 new highs and 40 new lows. On the Nasdaq, 2,516 stocks rose and 2,231 fell as advancing issues outnumbered decliners by a 1.13-to-1 ratio.
The S&P 500 posted 20 new 52-week highs and one new low while the Nasdaq Composite recorded 129 new highs and 39 new lows.
On U.S. exchanges, 18.22 billion shares changed hands compared with the 19.11 billion moving average for the last 20 sessions.
Reuters, Globe staff