Wall Street stocks touch records on upbeat earnings, dip in oil
Market Overview and Key Financial Movements
By Lawrence Delevingne and Amanda Cooper
May 5 (Reuters) - U.S. and global stocks jumped on Tuesday, taking heart from a series of robust earnings, while oil prices eased despite still-simmering hostilities between the U.S. and Iran over the Strait of Hormuz.
Wall Street Performance
On Wall Street, the S&P 500 and Nasdaq notched record high closes on Tuesday, lifted by Intel and other AI-related stocks. The Dow Jones Industrial Average also rose 0.73%, with the S&P 500 adding 0.8%, and the Nasdaq Composite about 1% higher.
Global Markets Reaction
In Europe, the STOXX 600 rose about 0.7%. MSCI's gauge of stocks across the globe gained 0.54%.
Geopolitical Tensions and Oil Prices
The U.S. and Iran launched new attacks in the Gulf on Monday as they wrestled for control over the Strait of Hormuz with duelling maritime blockades, not long after U.S. President Donald Trump launched a new effort to get stranded tankers and other ships through the vital energy-trade chokepoint. Washington said a shaky ceasefire was still intact.
Oil Market Movements
In oil markets, Brent futures <LCOc1> fell $4.57, or 4%, to settle at $109.87 a barrel, having jumped in the previous session on heightened worries about supply disruption.
Investor Sentiment Amid Tensions
Scott Wren, senior global market strategist at the Wells Fargo Investment Institute, said that "complacent" investors continue to look beyond the U.S.-Iran war and higher oil prices, and are more focused on robust U.S. corporate earnings and capital expenditures.
"The risk-on attitude persists even in the face of what clearly are an array of potential problem issues," Wren wrote in an email.
Corporate Earnings and Economic Data
Data from S&P Global Market Intelligence showed 83% of S&P 500 companies that have already reported have beaten EPS estimates and 78.2% of them have beaten revenue estimates. LSEG data shows earnings growth for the S&P 500 is now projected to top 18% in the first quarter, up from estimates of around 12.8% just a month ago.
AI and Technology Sector Impact
"With no signs of slowing down, AI-driven spending will likely continue to do the heavy lifting for S&P 500 earnings growth, led by the technology sector," said Jeff Buchbinder, chief equity strategist at LPL Financial.
Currency and Commodity Markets
Yen Intervention Watch
Traders also had their eyes on the yen after the Japanese currency briefly jumped in the previous session, stoking speculation of another round of intervention from Tokyo.
The yen was last slightly weaker on the day, leaving the dollar up around 0.4% at 157.82, after Monday's short-lived surge that saw the Japanese currency touch an intraday high of 155.69.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was flat on the day.
Bond Yields, Gold, and Bitcoin
U.S. Treasury yields fell on Tuesday, with benchmark U.S. 10-year notes down 2.2 basis points to 4.424%.
Elsewhere, spot gold rose about 0.75% to $4,554 an ounce, above Monday's trough at $4,500, the lowest since March 31.
Bitcoin continued its rebound, trading at $81,652, up from around $62,800 in early February.
(Reporting by Lawrence Delevingne in Boston, Amanda Cooper in London and Rae Wee in Singapore; Editing by Nick Zieminski, Keith Weir and Sanjeev Miglani)
