Wall Street eyes record, ASX set for flat start
Stan Choe
Updated ,first published
The US stock market hit a record after adding to a two-week rally built on hopes that war with Iran will not create a worst-case scenario for the global economy. It remains to be seen whether Wall Street is right to have so much hope for peace and whether stocks should rebound to their highest levels ever.
The S&P 500 rose 0.8 percent, eclipsing its all-time high from January. The index, at the heart of many retirement accounts, rose more than 10 percent after falling nearly 10 percent below its record high in late March, a decline so steep that Wall Street called it a “correction.”
The Australian share market is set for a flat start, with futures pointing to a 4-point decline at the open at 6.29am AEST. The ASX was up 0.1 per cent on Wednesday. The Australian dollar was trading at 71.76¢ at 5.14am AEDT.
Much of this rise was driven by expectations that tensions in the war would ease and oil would resume flowing from the Persian Gulf to customers around the world. Hopes remained high on Wednesday, with regional officials telling The Associated Press that the United States and Iran have an “agreement in principle” to extend the ceasefire to allow for more diplomacy.
Of course, as in the war before, stocks could easily fall if these expectations fall below. Oil prices moved up and down on Wednesday, indicating continued caution in financial markets. Stock market indices around the world showed only modest movements after their big rises in recent weeks.
The barrel price of Brent crude oil, the international standard, increased by 0.1 percent to $94.93. This is still well above the pre-war price of roughly $70, but lower than the peak of $119 at the height of war-related concerns.
The Dow Jones Industrial Average fell 72 points, or 0.1 percent, while the Nasdaq composite rose 1.6 percent.
But if US-Iran talks take place and they are successful, the war may end up being only a temporary setback for the global economy, rather than a new normal of sky-high oil prices and inflation. This could allow investors to turn their attention to what matters most to stock prices: money.
Despite the daily noise that can affect investors’ views, stock prices tend to move in the direction of company profits over the long term. And the positive trends there showed that the stock markets were in good shape before the war began. Analysts predict that growth will continue, at least for now.
Bank of America rose 1.8 percent after it said it made $8.6 billion in profit in the first three months of the year, more than analysts expected. CEO Brian Moynihan also said the bank sees signs of a “resilient American economy,” including robust spending by U.S. consumers.
Morgan Stanley rose 4.5 percent after the investment bank also reported better-than-expected quarterly results.
Companies hurt by concerns about AI technology earlier in the year also rose to recoup most of their losses in 2026. Some of the concerns revolve around companies potentially spending too much to develop AI capabilities, while others have focused on businesses that could become obsolete due to AI-powered competition.
Concerns have run so deep that they have shaken private lending companies that make loans to software companies and others potentially threatened by artificial intelligence.
ServiceNow rose 7.3 percent, Oracle rose 4.2 percent and Ares Management gained 5.9 percent for some of Wednesday’s big gains in the S&P 500. All are still down between 12 percent and 39 percent for the year so far.
With stock prices generally back to where they were in January and analysts’ expectations for future profits at major U.S. companies only rising since then, optimists say many stocks look cheaper than they did a few months ago.
“We see compelling opportunity potential today to move into areas of the market, such as technology stocks, that look like better buys than they were earlier this year,” said Mason Mendez, investment strategy analyst at Wells Fargo Investment Institute.
Allbirds’ stock price soared 582 percent to nearly $17 after the company announced it was shifting gears into the AI computing infrastructure sector and changing its name to NewBird AI. The Allbirds name will remain on the shoe brand, which the company has agreed to sell to American Exchange Group.
Nike rose 2.8 percent after CEO Elliott Hill and Nike director and Apple CEO Tim Cook announced they had purchased a total of 48,000 shares of the athletic shoe maker for about $1 million each. Nike shares are still down about 29 percent this year.
On the losing side of Wall Street was Live Nation Entertainment. It fell 6.3 percent after the jury found that the concert giant and its subsidiary Ticketmaster had a harmful monopoly on major concert venues.
Overall, the S&P 500 rose 55.57 points to 7,022.95. The Dow Jones Industrial Average fell 72.27 to 48,463.72, and the Nasdaq composite index rose 376.93 to 24,016.02.
Following the moderate rise in foreign stock markets in Asia, indices in Europe followed a mixed course. South Korea’s Kospi was an outlier, rising 2.1 percent.
In the bond market, the yield on the 10-year Treasury note rose from 4.26 percent to 4.28 percent at the end of Tuesday.
