Wall Street closed at a record high on Wednesday as the S&P 500 ended at 7,137.90, defying persistent concerns over elevated oil prices and a still-tense geopolitical standoff with Iran.
The rally was driven by strong corporate earnings, with seven of the 11 GICS sectors finishing higher, led by information technology stocks that gained 2.31%. Investors appeared to look past inflation worries and weak consumer confidence, focusing instead on company profitability, which has remained resilient despite the ongoing conflict.
In Asia, Japan’s Nikkei 225 briefly touched an all-time intraday high of 60,013.98 before slipping 0.31% on profit-taking, whereas South Korea’s Kospi reached a record 6,538.72, up 1.58%. Both markets benefited from the extended U.S.-Iran ceasefire, which eased fears of a broader Middle East disruption to oil supplies and global trade.
Japan’s manufacturing activity expanded at its fastest pace in four years in April, according to the S&P Global flash PMI, as firms increased output amid supply chain concerns tied to regional tensions. SoftBank Group Corp gained over 6%, with Bloomberg reporting the company is pursuing a $10 billion margin loan backed by its OpenAI holdings to fund its AI expansion.
South Korea’s economy grew 1.7% in the first quarter, exceeding Reuters’ estimates of 1.0% and rebounding from a 0.2% contraction in the prior quarter — the fastest growth since Q3 2020. Samsung Electronics shares hit a new intraday record of 227,000 won, though labor unrest loomed as unions planned a rally for over 30,000 workers ahead of a potential strike next month.
Oil prices rose modestly, with West Texas Intermediate futures up 0.49% to $93.42 per barrel and Brent crude adding 0.28% to $102.20 per barrel. The AP noted that Brent crude, which had spiked to roughly $119 during peak war fears, has since pulled back and was bouncing around $100 — a sign that markets are pricing in a reduced risk of a Strait of Hormuz blockade.
After hours, Tesla shares initially jumped 4% on better-than-expected first-quarter adjusted earnings of 41 cents per share but later slipped about 1% in extended trading. IBM fell nearly 7% after failing to raise its full-year guidance despite posting an earnings beat.
For more on this story, see S&P 500 and Nasdaq Hit Record Highs on Peace Optimism.
The SOXX semiconductor ETF extended its streak to ten straight intraday record highs, while the XLK technology ETF aimed for a historic 16th consecutive win, underscoring sustained investor appetite for chip and tech stocks.
How corporate earnings are overriding geopolitical fears in equity markets
The core driver of the rally remains company profitability, which has held up even as households express lower confidence and gasoline prices remain high. As the AP report explains, Wall Street’s focus has returned to the fundamental equation: how much money companies are making and what investors are willing to pay for it. When fear dominated early in the Iran standoff, stocks fell; now, with the ceasefire holding and earnings solid, that fear has receded.
Why Asian markets are outperforming despite regional exposure to Middle East tensions
Japan and South Korea reached record highs not in spite of the Iran situation, but partly because of it — the ceasefire reduced the risk of oil supply shocks that could have derailed their export-driven economies. Strong manufacturing data in Japan and better-than-expected GDP growth in South Korea reinforced the view that regional economies can withstand external pressures, especially when supported by corporate strength in tech and semiconductors.
What the after-hours moves in Tesla and IBM reveal about investor sentiment
Tesla’s initial pop followed by a pullback suggests investors are rewarding earnings surprises but remain cautious about forward guidance, especially in a high-interest-rate environment. IBM’s sharp decline after holding earnings but refusing to raise outlook highlights how markets now punish even solid results if they lack upward revision — a sign of elevated expectations in the tech sector.
Why is the stock market rising when the Iran war is still ongoing?
Investors are focusing on corporate earnings, which have remained strong enough to offset geopolitical concerns, especially as the U.S.-Iran ceasefire has reduced fears of a major oil supply disruption.
What role did the ceasefire play in Asian market gains?
The extended U.S.-Iran ceasefire eased tensions in the Strait of Hormuz, lowering the risk of oil price spikes that could have harmed import-dependent economies like Japan and South Korea, thereby boosting investor confidence in their markets.
Are tech stocks still leading the rally, and what does that mean for broader market health?
Yes, technology stocks led sector gains with a 2.31% rise, and ETFs like XLK and SOXX are on record-breaking streaks, indicating concentrated but sustained investor confidence in innovation-driven growth, even as other sectors lag.
