TLDR
- The S&P 500 surpassed the historic 7,000 point threshold for the first time on Wednesday
- The Nasdaq extended its rally to 11 consecutive sessions, marking its longest run since late 2021
- Optimism surrounding potential US-Iran ceasefire negotiations is boosting market sentiment
- Strong quarterly results from Bank of America and Morgan Stanley provided additional momentum
- Major earnings reports from Netflix, PepsiCo, and Charles Schwab expected Thursday
U.S. equity futures traded in positive territory Thursday morning following a powerful rally that propelled both the S&P 500 and Nasdaq Composite to unprecedented closing highs during Wednesday’s session.
The benchmark S&P 500 index breached the 7,000-point barrier for the first time since its inception. Meanwhile, the Nasdaq surged past 24,000 and notched its 11th consecutive winning session, representing its longest uninterrupted advance since November 2021.
Futures contracts on the S&P 500 climbed 0.1% in pre-market activity Thursday. Nasdaq 100 futures advanced 0.2%. Dow Jones Industrial Average futures inched higher by less than 0.1%.
The primary catalyst fueling the market advance is increasing confidence that Washington and Tehran will extend their existing two-week truce agreement, which reaches its expiration date on April 22.
Both nations are reportedly participating in indirect diplomatic discussions. Karoline Levitt, White House press secretary, confirmed Wednesday that the United States remains “very much engaged in these negotiations.”
What’s Driving the Rally
Technology shares spearheaded Wednesday’s gains, enabling the Nasdaq to outperform the broader market indices. Robust earnings announcements from Bank of America and Morgan Stanley further reinforced investor optimism.
Chris Zaccarelli, chief investment officer at Northlight Asset Management, emphasized that the rally rests on solid fundamentals.
“The underlying fundamentals are strong enough to support this bull market and it appears that both sides want this war to end,” he said.
He noted that market participants are positioning themselves with the anticipation that a diplomatic breakthrough is imminent, while also recognizing the possibility that hostilities could resume.
Earnings and Economic Data on Deck
Thursday’s calendar features earnings releases from several high-profile corporations, including Netflix, PepsiCo, and Charles Schwab.
On the economic data front, weekly initial jobless claims figures are scheduled for release, alongside March’s industrial production report.
Oil prices maintained elevated levels despite diplomatic optimism. Brent crude advanced 0.6% to reach $95.54 per barrel. West Texas Intermediate gained 0.7% to trade at $91.97 per barrel.
The U.S. dollar remained unchanged against a basket of major global currencies. The benchmark 10-year Treasury note yield declined one basis point to 4.27%.
Jobless claims figures published Thursday morning indicated claims retreated modestly from the previous week’s level.
The dollar strengthened later during morning trading as uncertainty mounted regarding the precise timeline of US-Iran diplomatic discussions, according to market analysts.
Treasury yields predominantly declined on tempered optimism surrounding a possible Middle East peace agreement.
As of early Thursday pre-market activity, E-Mini S&P 500 futures stood at 7,070, while E-Mini Nasdaq 100 futures traded at 26,414.
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