Dow Jones, S&P 500 and Nasdaq index futures are currently pointing to a higher open on Friday, with stocks likely to see further upside after recovering from an initial pullback to end the previous session modestly higher.
Stocks may continue to benefit from optimism about an end to the U.S.-Iran war even as crude oil prices remain elevated going into the busy Memorial Day weekend.
In remarks to reporters on Thursday, Secretary of State Marco Rubio claimed the U.S. and Iran have made “some progress” in negotiations to end the war.
Rubio also said there have been “some good signs” but cautioned he doesn’t want to be “overly optimistic” and noted President Donald Trump has been clear he has “other options” if the U.S. and Iran can’t get a “good deal.”
One of the sticking points seems to be Iran’s efforts to establish a tolling system for the Strait of Hormuz, which Rubio called “unacceptable” and said “would make a diplomatic deal unfeasible.”
Rubio’s comments come as reports from Iranian state media suggest the latest U.S. peace proposal has narrowed some of the gaps between the two countries.
Following the rally seen during Wednesday’s session, stocks moved back to the downside in early trading on Thursday before regaining ground over the course of the day.
The major averages saw considerable volatility in the latter part of the session but finished in positive territory, with the Dow reaching a new record closing high.
The Dow advanced 276.31 points or 0.6 percent to 50,285.66, the S&P 500 rose 12.75 points or 0.2 percent to 7,445.72 and the Nasdaq inched up 22.74 points or 0.1 percent to 26,293.10.
The initial pullback on Wall Street came amid a substantial rebound by the price of crude oil, with U.S. crude oil futures surging as much as 4.5 percent after plummeting by 5.7 percent on Wednesday.
Crude oil futures jumped back above $100 a barrel as traders awaited developments on a potential U.S.-Iran peace deal.
Oil prices saw further upside after a report from Reuters said Iran’s Supreme Leader has issued a directive that the country’s near-weapons-grade uranium should not be sent abroad.
However, crude oil futures saw a substantial downturn after an X post from Al Jazeera reporter Ali Hashem said a senior Iranian official denied the reports, contributing to the recovery by stocks.
The official told Hashem “no new order has been issued” and called the reports “propaganda by the enemies of the deal.”
Meanwhile, traders seemed to shrug off the negative reaction to earnings news from Nvidia (NASDAQ:NVDA), although the AI leader still slumped by 1.8 percent.
The decrease by shares of Nvidia came even though the chipmaker reported better than expected first quarter results, as investors worry about the sustainability of its rapid growth.
“The chip giant is starting to sound like a broken record, playing the same message over and over again,” said Dan Coatsworth, head of markets at AJ Bell. It effectively says AI demand is strong, lots of customers are queuing up for its chips, and there is still much more to go for.”
“The market’s attention is now focused on how long Nvidia can sustain this momentum,” he added. “Even the fastest or strongest athletes run out of steam at some point, and investors are starting to worry that Nvidia cannot keep up its current pace.”
Disappointing earnings news from Walmart (NYSE:WMT) also generated some negative sentiment early in the session, with the retail giant plunging by 7.3 percent.
Computer hardware stocks moved sharply higher over the course of the session, driving the NYSE Arca Computer Hardware Index up by 4.9 percent.
The rally by the sector came after a report from the Wall Street Journal said Trump administration is awarding $2 billion in grants to nine quantum-computing companies.
Substantial strength also emerged among airline stocks, as reflected by the 4.5 percent spike by the NYSE Arca Airline Index.
Networking, pharmaceutical and semiconductor stocks also showed strong moves to the upside, while energy stocks came under pressure amid the downturn by the price of crude oil.