Stocks rose to record highs on Thursday as tensions between Iran and the U.S. eased for the time being.
The Dow Jones Industrial Average traded 134 points higher, or 0.5%. The S&P 500 climbed 0.5% while the Nasdaq Composite jumped 0.8%.
AMD shares gained more than 4% after an analyst at Mizuho Securities upgraded them to buy from neutral, citing a potentially stronger server market in 2020. Goldman Sachs climbed 1.5% after Bank of America upgraded the bank to buy from neutral, citing an attractive valuation and the benefits of a possible global economic rebound.
Apple shares jumped 1.7% to a record high after a Reuters report said, citing government data, that iPhone sales in China rose 18% in December.
Wall Street is coming off a solid performance on Wednesday that led the Nasdaq to intraday and closing record highs. The S&P 500 also posted an intraday all-time high after President Donald Trump said Iran appeared to be “standing down” after firing a barrage of missiles at military bases housing U.S. troops in Iraq.
“We do not want to be dismissive of the political ramification of recent events, but we doubt that they will have a long-lasting effect on the trajectory of markets unless matters develop well beyond where they stand today,” said Michael Shaoul, chairman and CEO of Marketfield Asset Management, in a note.
The attack was in retaliation for the U.S. killing of Iranian Gen. Qasem Soleimani. Trump also suggested the U.S. would be open to negotiations with the Islamic Republic. “We must all work together toward making a deal with Iran that makes the world a safer and more peaceful place,” Trump said.
Traders work on the floor at the New York Stock Exchange.
Brendan McDermid | Reuters
Those remarks — coupled with the fact that no U.S. casualties were reported from the attack — soothed investor fears of further escalation between the two countries. They also quelled worries of a sharp jump in energy prices.
Crude prices traded just below $60 per barrel on Thursday, well below their recent highs of more than $65 per barrel. The move towards safe haven assets such as gold and Treasurys has also reversed. Gold futures are trading off a near seven-year high while the 10-year Treasury yield was at 1.87%. Earlier in the week, the benchmark rate broke below 1.8%.
Wall Street also digested strong employment data on Thursday, which helped lift sentiment. Weekly jobless claims fell by 9,000 to 214,000 from 223,000. That’s better than the expected print of 220,000.
Thursday’s jobless claims data follows stronger-than-expected private payroll numbers released Wednesday. ADP and Moody’s Analytics said U.S. private payrolls increased by 202,000 in December, topping a Dow Jones estimate of 150,000.
Those numbers precede the Labor Department’s release of its monthly jobs report on Friday. Economists polled by Dow Jones expect the U.S. economy added 160,000 jobs last month.
In corporate news, Kohl’s shares dropped 8% after issuing earnings guidance to the low end of their fiscal 2019 forecast. Meanwhile, Bed Bath & Beyond pulled back more than 18% on news it is delaying the closure of 20 stores until fiscal 2020.
—CNBC’s Sam Meredith contributed to this report.
