On the 11th local time, all three major New York stock indexes closed higher. Geopolitical tensions in the Middle East rose again and international oil prices climbed, but gains in artificial intelligence-related tech stocks prevented the indexes from falling.
On the New York Stock Exchange, the blue-chip Dow Jones Industrial Average finished up 95.31 points at 49,704.47 from the previous trading day. The Dow rose 0.19%. The large-cap Standard & Poor's 500 index ended up 0.19% at 7,412.84. It broke above 7,400 for the first time and notched a record high on a closing basis. The tech-heavy Nasdaq composite also rose 0.1% to close at 26,274.13, setting a record high.
Investors focused on the military standoff between the United States and Iran. Iran sent the U.S. government a new proposal to end the war and lift economic sanctions on the country. But U.S. President Donald Trump firmly rejected the offer, saying it could not be fully accepted.
Trump told reporters that the cease-fire between the two countries had weakened to an unbelievable degree. The United States and Iran had maintained a cease-fire for the past month while refraining from full-scale war. But with the United States rejecting the proposal, fears grew that a full-scale war could erupt again in the Middle East. Marcus, an analyst at Wolfe Research, noted that "the biggest sticking point is how to handle Iran's enriched uranium."
Instability in the Middle East immediately led to a sharp jump in international oil prices. West Texas Intermediate futures rose 2.78% to settle at $98.07 a barrel. Brent futures, the global benchmark, climbed 2.88% to $104.20 a barrel.
Rising oil prices are cited as a key factor fueling inflation concerns. On the day, worries about price increases pushed up U.S. Treasury yields. The 10-year U.S. Treasury yield, a benchmark for market rates, rose 0.05 percentage points to 4.41%. Rising yields mean demand for Government Bonds has fallen and prices have dropped. Major Wall Street banks including Goldman Sachs and Bank of America delayed their expected timing for rate cuts, saying the Federal Reserve will hold rates through the end of the year given jobs and inflation data. Economists also expect the consumer price index for April, due this week, to rise 0.6% from the prior month.
Macro headwinds stacked up, but tech stocks maintained gains. Memory chip corporations Micron surged 6.5%, and Nvidia, seen as the leader in artificial intelligence, rose nearly 2%. Jay Hatfield, chief executive of Infrastructure Capital Advisors, said, "The tech boom is so strong that high oil prices are offsetting the impact on the U.S. economy and the stock market," adding that "market participants are losing interest in the Middle East situation."
Citi strategists Scott Chronert also picked the Nasdaq 100, which is filled with corporations directly benefiting from the AI boom, as his favorite investment destination. He said that while tech valuations are historically high, they are not overvalued considering expected profit growth. Positive outlooks for corporate earnings also lifted the indexes. Ed Yardeni, president of Yardeni Research, sharply raised his year-end target for the Standard & Poor's 500 to 8,250 from 7,700.
By contrast, retailers and consumer stocks, whose results vary widely with inflation, slumped. The State Street retail exchange-traded fund fell more than 3% on the day. Footwear brand Caleres and department store chain Kohl's each plunged more than 9%. J.C. O'Hara, a strategist at financial firm ROTH, said consumer stocks are turning into a drag on overall portfolio returns. Shares of fast-food chain Wendy's were hit after JPMorgan downgraded its investment rating. Wendy's U.S. store sales fell nearly 7% in the first quarter.
Netflix shares fell more than 2% on news of a lawsuit filed by Texas prosecutors. Texas Attorney General Ken Paxton claimed Netflix collected sensitive personal data without consumer consent and sold it to commercial data brokers, generating massive revenue. Shares of meat processor Tyson Foods fell more than 4% intraday before paring losses after reports that the Donald Trump administration is preparing to temporarily lower the beef import tariff. The prospect of cheaper imported beef raised concerns that domestic firms could lose competitiveness.
Shares of biotech corporations Moderna at one point jumped nearly 9% on news that an American tested positive for hantavirus. Hantavirus is a deadly respiratory disease transmitted by rodents such as mice. Investor expectations were stoked by Moderna having released last week that it entered the initial development phase for a hantavirus vaccine.