S&P Index Nears Record Height as Chipmakers Extend Rally for 16th Consecutive Session

Stocks Rise on Strong Corporate Profits and Positive Economic Signs

A day after President Donald Trump extended a ceasefire with Iran, the US stock market saw a significant boost as a slew of strong corporate profits lifted stocks. The nearly 1% gain in the S&P 500 index brought it close to a record, while oil prices also surged. The gains in the market were largely driven by the performance of individual companies, with Boeing Co. jumping on solid deliveries and Chipmakers rising for a 16th straight day, the longest-ever advance.

Other notable gains were seen in the technology sector, with Tesla Inc.'s results due later in the day, and Spirit Aviation Holdings Inc. soaring on speculation that the US is near a rescue deal. The cannabis sector also rallied on news reports that the Trump administration will ease marijuana restrictions. Meanwhile, Brent oil hit $102, and Bitcoin topped $78,000.

Despite the positive signs in the market, tensions remain high in the Middle East, with Iran continuing to control passage through the Strait of Hormuz, a key trade route. The US has refused to lift its blockade on Iranian-linked vessels, and it remains to be seen whether the two sides can reach a deal.

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The ceasefire extension by Trump was reported to be for three to five days, not indefinitely, according to Fox News. A second round of talks may be coming as soon as Friday, according to the New York Post. However, Iran currently has no plans to negotiate with the US at the end of this week, according to the Tasnim news agency.

About 81% of the S&P 500 companies reporting first-quarter results have beaten analyst earnings estimates so far, according to data compiled by Bloomberg. Experts believe that investors are already starting to look beyond the current geopolitical risks and focus on the fundamentals of the economy.

"We've seen this movie before — the headlines hit, the market reacts, volatility spikes, and then it settles down and refocuses on fundamentals," said Kenny Polcari at SlateStone Wealth. Strong corporate profits, the revival of the artificial-intelligence trade, and an otherwise resilient economy have all contributed to the positive sentiment in the market.

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Rick Gardner at RGA Investments noted that while there is still uncertainty and saber rattling over the Iran conflict, markets are forward-looking. "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.