Dow edges to record on renewed Hormuz deal optimism
US Stock markets climbed but then stalled on Wednesday as investors digested a wave of company earnings that broadly surpassed expectations, while assessing the chances of a US-Iran deal to reopen the Strait of Hormuz. After pushing strongly ahead in early trading on Wall Street, momentum weakened for major US indices, with the tech-rich Nasdaq and broad-based S&P 500 finishing lower. The Dow…
On Wednesday, US stock markets experienced a mixed performance, edging towards a record high before stalling as investors digested a surge of company earnings that largely beat expectations. Following a strong start on Wall Street, major US indices, including the tech-centric Nasdaq and the broad-based S&P 500, finished lower. The Dow Jones Industrial Average managed to close higher by 0.5%, reaching a third consecutive record high.
Analyst Patrick O'Hare explained that the market was taking a brief pause, and most investors maintained a bullish outlook. Oil prices were volatile, fluctuating as market participants tried to understand the latest developments regarding a potential reopening of the Strait of Hormuz. Iran and Oman reportedly reached an agreement on a route for ships navigating the Strait, while Tehran demanded that the United States fulfill its commitment to end its naval blockade of Iran's ports.
Iran's Foreign Ministry spokesman, Esmaeil Baqaei, emphasized that the US blockade and other aggressive actions against Iran and its interests remained a source of insecurity in the Strait. Despite the uncertainty surrounding the Strait of Hormuz, oil prices had dropped significantly on both Monday and Tuesday due to the prospect of an accord between the US and Iran that would reopen the Strait.
Analyst Chris Beauchamp noted that even if the US' international standing took a hit, investors were now primarily concerned about the positive impact of lower oil prices on inflation and the potential to reduce the likelihood of Federal Reserve interest rate hikes in 2026. Among individual companies, SpaceX experienced a 13.6% decline after Elon Musk's rocket and satellite company reported its first quarterly earnings as a publicly traded entity.
Concerns over SpaceX's increased spending, which exceeded $18 billion in the three months leading up to June, were cited by analysts as contributing to the drop. Advanced Micro Devices (AMD), a leading processor and graphics solutions provider, declined around 7% even though it surpassed analysts' expectations. The Dow Jones ended the day at 54,349, while the Nasdaq fell to 26,363, and the S&P 500 slipped to 7,723.
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