By Elsie Kamsiyochi
U.S. stock markets continued their upward march on Thursday, with the S&P 500 and Nasdaq on track to record their strongest monthly performances since 2020, even as rising oil prices and growing tensions in the Middle East threatened to shake investor confidence.
The rally underscored how strongly investors are leaning on corporate earnings to support the market. Despite fears that conflict involving Iran could disrupt global energy supplies and push inflation higher, traders largely focused on better-than-expected results from major companies, which helped offset concerns about geopolitical instability.
By midday trading in New York, the Dow Jones Industrial Average had climbed more than 680 points, or 1.4%, while the S&P 500 gained nearly 0.5%. The Nasdaq, weighed down by mixed reactions to technology earnings, still managed a modest advance. The gains left all three major indexes positioned for a powerful finish to April, a month many expected would be dominated by fear rather than optimism.
Market analysts said investors are currently engaged in a battle between two opposing forces — solid earnings on one side and geopolitical risk on the other. For now, earnings appear to be winning.
Strong profit reports from major corporations have reassured traders that many businesses remain resilient even in an uncertain economic environment. However, some strategists warned that this balance could shift quickly if higher oil prices begin to squeeze consumer spending and corporate profit margins.
Fresh economic data added another layer to the market picture. New figures showed the U.S. economy grew faster in the first quarter than expected, helped in part by stronger government spending. At the same time, inflation remained stubbornly above the Federal Reserve’s long-term target. Core inflation, closely watched by policymakers, stayed elevated, reinforcing expectations that the central bank may keep interest rates higher for longer.
That combination of stronger growth and persistent inflation helped explain why Federal Reserve officials decided to leave rates unchanged this week. Several policymakers have recently signaled concern that inflation is proving harder to tame, reducing the chances of near-term rate cuts that investors had once hoped for earlier this year.
Technology stocks delivered some of the day’s biggest moves. surged after reporting strong cloud revenue and continued demand for artificial intelligence services, lifting investor sentiment.
But not every tech giant shared in the enthusiasm. and fell sharply after investors reacted nervously to their aggressive spending plans for AI infrastructure, raising concerns that profit growth may not keep pace with rising costs.
Energy markets remained a major source of uncertainty. Brent crude briefly climbed to nearly $110 per barrel, its highest level in almost four years, as traders feared a prolonged disruption in global supply if tensions between Washington and Tehran escalate further. Although prices later eased slightly, elevated oil costs remain a significant threat to both inflation and market stability in the weeks ahead.
Outside of technology, several major companies also boosted sentiment. jumped after raising its annual profit outlook on strong demand for its weight-loss treatments, while rose to a record high after reporting stronger-than-expected quarterly earnings.
For now, Wall Street appears willing to look beyond global risks and focus on the strength of corporate America. But analysts caution that the market’s resilience may depend on how long that confidence can withstand rising oil prices, persistent inflation, and the possibility of a broader geopolitical crisis.
Source Reuters
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