The benchmark S&P 500 and tech-heavy Nasdaq rose modestly to record closing highs for a second straight day on Thursday on optimism that the worst of the Middle East conflict was over after Israel agreed to a temporary ceasefire with Lebanon and US President Donald Trump hinted that the US and Iran could meet again. However, after Trump announced a 10-day truce between Israel and Lebanon and told reporters that Iran had offered not to possess nuclear weapons for more than 20 years, the trade stalled. Earlier in the day, Bloomberg quoted Gulf and European officials as saying the US needed about six months to reach an Iran deal.

“You’ve seen markets fluctuate between more positive and slightly neutral headlines,” said Chris Zachrelli, chief investment officer at Northlight Asset Management in Charlotte, North Carolina, noting that for the past month and a half, “trade has been about the Iran war.”

Mixed economic trends While hopes for diplomatic progress have lifted sentiment this week, some strategists have said clearer signs of peace may be needed to sustain the momentum. Robert Phipps, director of Sterling Capital Management in Austin, Texas, also pointed to a mixed bag of economic data on Thursday. The US New applications for unemployment benefits fell more than expected last week, suggesting labor market conditions remained stable, although employers are cautious about increasing headcount as the war with Iran weighs on the economy.

“War is still the single most important driver of the market,” Phipps said. “The rubber band was stretched too much to the downside. It has pulled back and is no longer stretched to the downside… Now the market needs to start trading on its own fundamentals.”

According to preliminary data, the S&P 500 rose 16.63 points, or 0.24%, to close at 7,040.09, while the Nasdaq Composite gained 80.98 points, or 0.34%, to close at 24,097.00. The Dow Jones Industrial Average rose 101.37 points, or 0.21%, to 48,565.09.

Nasdaq and S&P 500 touched intraday records. The Nasdaq’s gain marked its 12th straight advance, its longest winning streak since July 2009.

Results steer sentiment

Market moves can become more volatile as corporate earnings season gathers pace. US beverages company PepsiCo benefited by beating estimates for quarterly profit. Medical device maker Abbott cut its full-year profit forecast to its lowest level since November 2023, while brokerage Charles Schwab also fell after the results were released.

Netflix is ​​due to report after markets close.

After the big movers included Myseum, it was rebranded as Myseum.AI. The rally followed a more dramatic gain in sneaker maker Allbirds on Wednesday after it said it was leading AI.

Voyager Technologies’ boost came after NASA signed an order for the company to conduct the seventh private astronaut mission to the International Space Station, the company’s first choice for such a mission.