Wall Street closes at a record for the first time since end of January

Investing.com -- Wall Street ended mixed on Wednesday, as investors eyed optimism for renewed negotiations between the U.S. and Iran as well as a string of fresh corporate results. 

The S&P 500 hit a new intraday all-time high and closed at a record level for the first time since the end of January, marking an impressive rebound for U.S. stocks after a slump in March due to the Middle East conflict. The benchmark index climbed 0.8% to close at 7,022.81 points.

The tech-heavy NASDAQ Composite added 1.6% to settle at 24,016.02 points, while the blue-chip Dow Jones Industrial Average slipped 0.2% to conclude at 48,463.72 points.

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Wall Street scales new heights

Despite recent volatility sparked by the Iran war and the effective closure of the Strait of Hormuz, one of the world’s most critical shipping chokepoints, U.S. stocks have continued to march broadly higher. While the S&P has returned to record levels, the Nasdaq has logged a 14% gain over the past 10 sessions and its longest winning streak since 2021.

Expectations are high around the nascent quarterly earnings season and have been further bolstered by Wall Street lenders, which noted this week that Americans are continuing to spend and borrow. The comments painted a picture of a resilient U.S. economy despite potential headwinds from an Iran-linked energy shock.

"The headlines about an expected ceasefire extension are helping sentiment. The Magnificent Eight leadership are driving the equity rally. Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) alone account for the entirety of today’s S&P 500 rally, which is occurring in a negative breadth environment. Profit taking ahead of earnings is emerging in some groups following the sharp equity market rally since the end of March," Michael O’Rourke, chief market strategist at Jones Trading, told Investing.com.

Wall Street suffered in March after the U.S. and Israel began their joint assault on Iran at the end of February. The S&P 500 slumped 5.1% in the month as oil prices soared, sparking widespread concerns of an inflationary shock. But U.S. stocks have rebounded impressively in April, largely on hopes for an end to hostilities in the Middle East.    

Trump says Iran war ’close to over’  

President Donald Trump has suggested that the U.S. war with Iran may be coming to a conclusion soon, even as the American military says an ongoing naval blockade has restricted shipping traffic in and out of Iran.

Speaking to UK’s Sky News, Trump said it was "very possible" that a permanent ceasefire agreement with Iran could be reached prior to the visit of King Charles later this month. He added that Iran has been "beaten up pretty bad."

Earlier, Trump told Maria Bartiromo of Fox News that the conflict, which began with joint U.S. and Israeli strikes on Iran in late February, is "close to over."

The New York Post also reported that Trump expects temporary U.S.-Iran ceasefire talks to resume in the next two days, following a first round of talks in Pakistan last weekend.

White House Press Secretary Karoline Leavitt on Wednesday told reporters that the U.S. "remain very much engaged" in negotiations and that the conversations were "productive and ongoing." 

"We feel good about the prospects of a deal," Leavitt said, adding that reports about the U.S. requesting for an extension to the ceasefire were not true. 

The U.S. and Iran have agreed to a tenuous two-week ceasefire until April 21. Hopes for de-escalation in the Middle East were furthered by Israel and Lebanon holding their first direct talks in decades this week in Washington. Israel has continued to carry out strikes against Iran-aligned Hezbollah targets in Lebanon, threatening to upend the halt to hostilities between the U.S. and Iran. Israel has disputed Iranian claims that Lebanon was included in the ceasefire deal.

Citing regional officials, the Associated Press reported mediators’ efforts to extend the ceasefire have made progress and both sides are now anticipated to return to the negotiating table. The news agency said mediators were working on a compromise to three of the main sticking points in the talks, such as Iran’s nuclear program, the closure of the Strait of Hormuz, and compensation for the war.

Press Secretary Leavitt said more talks would very likely be held again in Islamabad in Pakistan, adding that the country had been "incredible mediators" and were the "only mediator" in the negotiation.

U.S. blockade ’fully implemented’

Oil prices seesawed on Wednesday but remained well below the $100 a barrel threshold, as traders kept close tabs on supply flows through the Persian Gulf, particularly the vital Strait of Hormuz chokepoint. Compared to before the start of the conflict in late February, crude has stayed elevated, underpinning worries over a spike in inflationary pressures around the world. 

U.S. Central Command said it had now "fully implemented" a naval blockade on vessels entering and exiting Iranian ports, in a likely bid to pressure Tehran into a peace deal.

"After implementing the blockade on ships entering and departing Iranian ports, American forces halted economic trade going into and out of Iran by sea," CENTCOM said on X.

Reuters on Wednesday reported that Iran could consider allowing ships to sail freely through the Oman side ​of the Strait of Hormuz as part of proposals offered in negotiations with the U.S., citing a source briefed by Tehran.

Recent U.S. consumer and producer price data for March showed an acceleration in headline inflation due to the spike in oil prices, but not much impact on core inflation.

Trump on Wednesday also said on social media that China had agreed not to send weapons to Iran. 

"China is very happy that I am permanently opening the Strait of Hormuz. I am doing it for them, also - And the World. This situation will never happen again," the president said, adding that China’s leader Xi Jinping would give him a "big, fat, hug" on his visit to the Asian nation.

U.S. Treasury Secretary Scott Bessent on Wednesday told reporters that the blockade will also lead to a pause in China’s buying of Iranian oil. Bessent also added that waivers on Iranian and Russian oil at sea would not be renewed.

BofA also sees trading boost, Allbirds’ bizarre pivot

On the earnings front, Bank of America (NYSE:BAC) posted a rise in quarterly profit, becoming the latest U.S. lending giant to benefit from a rush of trading activity.

Market volatility sparked by the Iran war, a hawkish policy pivot from the Federal Reserve, and uncertainty around the impact of new artificial intelligence tools led to an escalation in market rotation, boosting revenue at trading desks across Wall Street.

Bank of America’s quarterly sales and trading revenue jumped by 13% to $6.4 billion. Shares of the firm ended about 2% higher.

Peer Morgan Stanley (NYSE:MS) posted better-than-anticipated first-quarter net revenue of $20.58 billion, thanks to strong equities sales and trading revenue as well.

Beyond banking, short-form video group Snap announced plans to dismiss 1,000 employees, including 16% of its full-time workers, and close over 300 open roles.

CEO Evan Spiegel said the changes will help to reduce the social media firm’s cost base by more than $500 million on an annualized basis by the second half of this year. Shares of Snap climbed 7.6% on the news.

In a notable move, class A shares of Allbirds (NASDAQ:BIRD) exploded nearly 600% after the struggling footwear firm announced a bizarre pivot into artificial intelligence compute infrastructure. The company plans to change its name to NewBird AI in connection with the business transformation.

Elsewhere, Tesla (NASDAQ:TSLA) surged 7.6% after top boss Elon Musk touted a key milestone achieved by the electric vehicle maker’s chip design team.    

Ayushman Ojha and Scott Kanowsky contributed to this article