US Stocks Surge to Record Highs on Optimism Surrounding US-Iran Diplomatic Talks
US Stocks Surge to All-Time Highs on Hopes of Iran-US Talks and Strong Corporate Earnings
The US stock market has experienced a significant boost, reaching all-time highs, driven by the prospects of renewed negotiations between the US and Iran, as well as a strong forecast from Intel Corp. and the closure of a probe into Federal Reserve Chair Jerome Powell. The S&P 500 index saw a nearly 1% gain on Friday, marking its longest weekly advance since 2024.
The market's optimism was further fueled by the news that President Donald Trump will send two envoys to Pakistan with the intention of engaging in talks with Iranian officials. The US delegation, led by special envoy Steve Witkoff and Jared Kushner, the president's son-in-law, is set to depart on Saturday for talks this weekend. Iranian Foreign Minister Abbas Araghchi plans to meet with the US delegation and intends to present a written response to a peace proposal, as reported by The New York Times.
The developments have sparked a surge in investor optimism, with traders boosting bets on interest-rate cuts as Treasury yields fell. The news also comes as the Justice Department's decision on Powell potentially clears the way for Kevin Warsh's confirmation as the next Fed leader. US crude prices dropped to around $94 as a result.
Read also: Intel Shares Reach New All-Time High Following Strong Earnings Forecast
Market Recap
| Company | Earnings Growth | Stock Performance |
|---|---|---|
| Intel Corp. | Record high | +10% |
| SAP SE | Revenue growth from cloud services | +5% |
| Taiwan Semiconductor Manufacturing Co. | Eased limits on single-stock fund holdings | +8% |
| Investment in Anthropic PBC | +3% |
Despite geopolitical risks, the market has remained resilient, buoyed by strong corporate earnings and a revival of the global tech trade. A gauge of chipmakers has climbed for an 18th straight day, with Intel Corp. hitting a record high. SAP SE reported revenue growth from its cloud services that beat estimates, while Taiwan Semiconductor Manufacturing Co. soared after Taiwan's financial regulator eased limits on single-stock fund holdings.
Google's investment of $10 billion in Anthropic PBC has also strengthened the relationship between the two companies, which are partners and rivals in the race to build artificial intelligence. The tech giant has the potential to invest an additional $30 billion. Looking ahead, five of the so-called Magnificent Seven - Amazon.com Inc., Alphabet Inc., Meta Platforms Inc., Microsoft Corp., and Apple Inc. - are due to report earnings next week.
Read also: Nvidia Surges Past Record Highs for First Time Since October
Investor Takeaway
Investors should be cautious of potential market volatility due to ongoing diplomatic talks.
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