Trump says Iran war "close to over" amid hopes for more negotiations
Investing.com -- Wall Street was 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.
At 12:25 ET (16:25 GMT), the benchmark S&P 500 index was up 0.5% to 6,998.88 points, briefly topping 7,000 points. The tech-heavy NASDAQ Composite added 1.2% to 23,919.77 points. The blue-chip Dow Jones Industrial Average was down 0.5% to 48,313.91 points.
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Despite recent volatility sparked by the Iran war and the effective closure of the Strait of Hormuz, one of the world’s critical shipping chokepoints, U.S. stocks have continued to march broadly higher. The benchmark S&P 500 closed near an all-time high on Tuesday, while the tech-heavy Nasdaq Composite 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 the picture of a U.S. economy resilient despite potential headwinds from an Iran-linked energy shock.
"At face value, the U.S. economy appears to be in a much better place to weather any economic damage that higher energy prices may trigger," said Michael Brown, Senior Research Strategist at Pepperstone, in a note. "Not only is the U.S. a net energy exporter, but the consumer was also in relatively good health ahead of conflict breaking out."
Brown added that tax refunds that will be paid out this year as a result of President Donald Trump’s signature budget bill passed last year are "likely to largely compensate for any higher expenditure on energy, further cushioning against any negative impact on consumption more broadly."
"On top of this, the recovery on Wall Street should allow the ‘wealth effect’ to persist, further propping up consumer spending among higher income bands," Brown said.
Trump says Iran war "close to over"
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 Sky News in the U.K., 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 talks in Pakistan last weekend.
Trump has repeatedly claimed that the fighting is nearing an end and that the U.S. had achieved its objectives in Iran, including hampering Tehran’s nuclear ambitions and limiting its military capabilities. Iran has largely denied these claims.
The U.S. and Iran 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.
Still, the U.S. military has said it is now fully enforcing a naval blockade against Iran, in a likely bid to pressure Tehran into a peace deal.
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.
Recent U.S. consumer and producer price data for March showed an acceleration in inflation, albeit not as fast as economists had anticipated.
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.
Trading revenue surges at Bank of America
On the earnings front, Bank of America has posted a rise in first-quarter 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 advanced more than 1%.
Peer Morgan Stanley 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 nearly 8% on the news.
“Investors have been pushing Snap to get aggressive on costs for a while (words like “bloated” have been used to describe the company’s cost structure), and so people will be pleased,” analysts at Vital Knowledge said in a note. But they added that the move could rekindle fears around AI job replacements which arose in response to similarly deep job cuts by financial services group Block several weeks ago.
Ayushman Ojha and Scott Kanowsky contributed to this article
