US equities surged on Wednesday, with the S&P 500 touching a fresh record high as investor sentiment strengthened on hopes of de-escalation in tensions between the United States and Iran, alongside robust corporate earnings that reinforced confidence in the resilience of the US economy.
The benchmark index rose 0.79% to 7,022.21 points, while the Nasdaq Composite climbed 1.59% to 24,014.43 points. The Dow Jones Industrial Average, however, slipped 0.16% to close at 48,460.55 points, reflecting a mixed session beneath the broader rally.
Markets were buoyed by signals suggesting a possible easing of the conflict involving the US and Israel against Iran, with expectations that diplomatic channels may soon reopen. Optimism around a potential agreement helped offset earlier concerns about disruptions to global energy supplies, particularly through the strategically vital Strait of Hormuz.
US President Donald Trump said the conflict was nearing its end and suggested that negotiations with Iran could resume shortly, fueling expectations of a de-escalation in geopolitical risk.
Investor confidence was further reinforced by strong early earnings reports from major US banks, signaling a solid start to the quarterly reporting season.
Bank of America and Morgan Stanley both posted stronger-than-expected results, with their shares rising 1.2% and 4.6% respectively. Analysts expect S&P 500 companies to deliver overall earnings growth, supporting the broader equity rally.
Despite the equity optimism, US Treasury markets showed signs of caution, with yields edging higher as investors reassessed risk conditions.
The yield on the two-year Treasury note rose to 3.761%, while the benchmark 10-year yield increased to 4.278%, reflecting shifting expectations around monetary policy and inflation risks tied to geopolitical instability.
Market analysts noted that disruptions linked to the Middle East conflict have had a more pronounced impact on European fixed-income markets than in the US, given Europe’s heavier reliance on imported energy. In Germany, the 10-year government bond yield also ticked higher to 3.045%.
While concerns over oil supply disruptions persist, particularly around the Strait of Hormuz, US markets
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