US sharemarkets closed at fresh record highs on Thursday as technology stocks regained momentum and investors responded positively to softer-than-expected inflation data and reports of progress in negotiations between the United States and Iran.
The S&P 500 rose 0.58% to close at 7,563.63, while the Nasdaq Composite gained 0.91% to finish at 26,917.47. Both indices reached fresh intraday and closing highs during the session. The Dow Jones Industrial Average edged 0.05% higher to 50,668.97.
Technology and software stocks led gains after Snowflake delivered stronger-than-expected earnings and upbeat guidance, reviving enthusiasm around artificial intelligence-related spending.
Snowflake surged 36.5% after beating market expectations on revenue and earnings while also announcing plans to spend US$6 billion on Amazon Web Services over five years.
The results lifted broader software and semiconductor stocks. The iShares Expanded Tech-Software Sector ETF rose 2.8%, while Sandisk gained 3.3%. Qualcomm climbed 4.2% and Advanced Micro Devices rose 4.6%.
Investor sentiment also improved after Axios reported that US and Iranian negotiators had agreed to a 60-day memorandum of understanding aimed at extending the ceasefire and continuing discussions around Iran’s nuclear program. President Donald Trump had not formally approved the agreement by the close of trade.
Markets were further supported by softer-than-expected inflation data. The Commerce Department reported that the personal consumption expenditures price index rose 0.4% in April, below expectations for a 0.5% increase. Annual inflation remained at 3.8%.
The inflation reading provided some relief for investors concerned that higher energy prices linked to the Iran war could intensify price pressures and delay interest rate cuts.
Oil and macro
Oil prices eased after reports of progress in negotiations between the US and Iran reduced fears of prolonged supply disruptions.
US West Texas Intermediate crude rose 0.3% to settle at US$88.90 a barrel, while Brent crude fell 0.6% to US$93.71 after both benchmarks traded higher earlier in the session.
Oil initially moved higher after Iran’s Revolutionary Guard reportedly targeted a US airbase following renewed US military strikes in Iran.
US economic data also remained in focus. American GDP grew at an annualised rate of 1.6% in the first quarter, according to revised Commerce Department figures.
Applications for US unemployment benefits rose slightly to 215,000 in the latest week but continued pointing to a relatively stable labour market.
Copper prices climbed to a two-week high, while gold edged higher.
Australian Market Outlook
Australian shares are expected to open higher following another record session on Wall Street and easing concerns around inflation and oil prices.
S&P/ASX 200 futures are up 56 points, or 0.6%, to 8,679 after the local market fell 1.4% in the previous session.
Technology and growth stocks may rebound locally following strong gains across US software and semiconductor sectors overnight.
Investor sentiment is also likely to improve after reports of a tentative agreement to extend the ceasefire in the Iran war helped stabilise oil markets and reduce pressure on bond yields.
Markets will continue monitoring developments surrounding negotiations between the US and Iran, as well as the outlook for global inflation and interest rates.
