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Bloomberg
US stocks extended gains and Treasuries turned lower after President Donald Trump toned down rhetoric against Iran, suggesting further military force is not needed.
The S&P 500 pushed to a fresh intraday record after Trump said Iran appears to be “standing down,†and announced further sanctions on the country.
Ten-year Treasury yields rose after tumbling overnight following Iranian airstrikes on American bases in Iraq. The dollar advanced, while oil fell below $61 a barrel in New York.
The Nasdaq indexes also notched all-time intraday highs as tech led the advance in equities. In company news, Boeing Co slumped after one of its planes crashed in Iran.
Walgreens Boots Alliance sank 6% after the drugstore giant’s profits slid, while Lennar Corp advanced as its earnings topped estimates.
“The main market driver right now is the generally improving macroeconomic backdrop and most other things are a distraction from that overriding theme,†Michael Reynolds, investment strategy officer at Glenmede, said by phone. “I think the loudest distraction has certainly been the geopolitical tension between the US and Iran going back and forth.â€
Markets settled back into a familiar risk-on mood that has pushed benchmarks to recent records, with investors betting that the president’s rhetoric on Wednesday will cool tensions in the Middle East.
The nervousness, caused by the US strike on a powerful Iranian general last week, had dented optimism over signs of economic resilience as well as a partial Sino-American trade deal.
Investors will likely turn their attention to the nonfarm jobs report due on Friday.
A gauge of private employment beat expectations on Wednesday.
Federal Reserve officials Richard Clarida, John Williams, James Bullard and Charles Evans speak on Thursday.
The US monthly non-farm employment report is due on Friday.
The S&P 500 Index advanced 0.7% as of 12:10 pm New York time. The Stoxx Europe 600 Index rose 0.1%. The MSCI Asia Pacific Index decreased 0.8%.
The Bloomberg Dollar Spot Index added 0.1%. The British pound fell 0.2% to $1.3098.
The euro dipped 0.3%
to $1.1124. The Japanese yen declined 0.2% to 108.68 per dollar.
The yield on 10-year Treasuries fell less than one basis point to 1.81%. The yield on two-year Treasuries fell less than one basis point to 1.54%.
Britain’s 10-year yield was little changed at 0.793%.
West Texas Intermediate crude decreased 1.9% to $61.50 a barrel.