U.S. stock futures traded modestly higher early Thursday, indicating Wall Street may open with smaller gains after the market’s strong rally over the past two trading sessions.
Investor sentiment continued to be supported by optimism surrounding a possible diplomatic resolution to the Middle East conflict, although traders appeared hesitant to aggressively extend recent gains.
Investors Look for More Clarity on U.S.-Iran Negotiations
The recent market advance has already pushed both the Nasdaq and the S&P 500 to fresh all-time highs, leading some investors to wait for more concrete developments in negotiations between Washington and Tehran before taking larger positions.
President Donald Trump said Wednesday that the United States and Iran had held “good talks over the last 24 hours” and suggested an agreement could potentially be reached within days.
A report from Axios indicated that U.S. officials are expecting a response from Iran within the next 24 to 48 hours regarding a one-page memorandum of understanding intended to bring the conflict to an end.
Axios also noted that while some officials remain doubtful a deal will ultimately materialize, the White House hopes to secure diplomatic progress before Trump concludes his visit to China next Friday. According to the report, military operations could resume if negotiations fail to produce an agreement by that time.
Wall Street Extends Rally to New Closing Records
Stocks moved sharply higher throughout Wednesday’s trading session, adding to Tuesday’s gains and lifting both the Nasdaq and the S&P 500 to new record closing highs.
The Nasdaq climbed 512.82 points, or 2%, to finish at 25,838.94. The S&P 500 advanced 105.90 points, or 1.5%, ending at 7,365.12, while the Dow Jones Industrial Average rose 612.34 points, or 1.2%, to close at 49,910.59.
The market rally was partly fueled by optimism that tensions in the Middle East could ease after Axios reported that the White House believes it is nearing an agreement with Iran tied to a one-page memorandum of understanding.
According to U.S. officials and sources familiar with the matter cited by Axios, the proposed arrangement would include Iran agreeing to halt nuclear enrichment activities, while both parties would ease restrictions related to shipping traffic through the Strait of Hormuz.
Although no final agreement has been reached, sources told Axios the negotiations are closer to a resolution than at any point since the conflict began.
Adding to positive market sentiment, President Donald Trump said the United States would temporarily suspend efforts to escort ships through the Strait of Hormuz while awaiting the possible completion and signing of the agreement.
AMD Sparks Strong Technology Sector Gains
Technology stocks also benefited from a major rally in Advanced Micro Devices (NASDAQ:AMD), with shares soaring 18.6% after the company released quarterly results that beat analyst expectations on both revenue and profit.
The chipmaker also issued stronger-than-expected guidance for the second quarter, helping fuel momentum across the semiconductor industry.
U.S. Private Hiring Comes in Above Expectations
On the economic side, payroll processing firm ADP reported that private sector job growth in the United States exceeded forecasts in April.
ADP said private payrolls increased by 109,000 jobs during the month after a revised gain of 61,000 jobs in March.
Economists had expected an increase of 85,000 jobs following the previously reported gain of 62,000 jobs for the prior month.
Gold, Airline and Semiconductor Stocks Lead Market Gains
Gold-related shares posted some of the strongest gains of the session as precious metal prices climbed sharply. The NYSE Arca Gold Bugs Index jumped 7.6%.
Computer hardware companies also rallied strongly, pushing the NYSE Arca Computer Hardware Index up 7.2%.
Airline stocks joined the broader market advance as well, driving the NYSE Arca Airline Index higher by 6.9%.
Semiconductor, steel, and biotechnology stocks also delivered strong performances during the trading session.
Meanwhile, energy shares moved sharply lower alongside declining crude oil prices.
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