Wall Street delivered a mixed performance on Wednesday, with the Dow Jones Industrial Average and S&P 500 climbing to fresh intraday record highs as investors cheered signs of progress toward a potential peace agreement involving Iran, easing concerns over inflation and interest rates.
The Dow rose 448 points (0.83%) to 54,533.87, while the S&P 500 edged up 0.07% to 7,742.05. In contrast, the Nasdaq Composite fell 0.49% to 26,455.43, ending its four-session winning streak as heavyweight technology stocks came under pressure.
Investor sentiment improved after reports suggested a proposed agreement involving Iran and Oman could reduce tensions in the Middle East, raising hopes for lower oil prices and easing inflationary pressures. The optimism also reduced expectations of an aggressive interest rate hike by the U.S. Federal Reserve.
Market strategist Kenny Polcari said investors remain optimistic but cautious, noting that markets are waiting for tangible progress after months of geopolitical uncertainty.
Technology stocks, however, limited broader gains. SpaceX shares plunged about 12% after the company reported its first earnings since going public. While revenue nearly doubled and losses narrowed, investors expressed concerns over heavy spending on artificial intelligence infrastructure and the expiry of the company’s IPO lock-up period.
Advanced Micro Devices (AMD) also dropped around 6% despite issuing stronger-than-expected revenue guidance, as investors sought clearer evidence that booming AI demand will translate into faster earnings growth.
On the positive side, healthcare stocks outperformed. Amgen gained 3.5% after reporting a 9% increase in second-quarter sales, while Eli Lilly rose 3.9% after raising its full-year revenue forecast. Disney also advanced 3.4% after posting better-than-expected quarterly profits.
Fresh economic data painted a mixed picture. U.S. private-sector hiring slowed in July, according to the ADP employment report, while the services sector continued expanding, with the ISM non-manufacturing index rising to 54.1, signaling ongoing economic growth.
Meanwhile, expectations for a Federal Reserve rate hike in September eased to 54.9%, down from 58.3% a week earlier, according to CME FedWatch, as investors assessed the latest economic data and geopolitical developments.
The latest market moves highlight investors’ growing focus on geopolitical progress and corporate earnings as key drivers of Wall Street’s record-setting rally.