US equities edged higher on Thursday, supported by declining oil prices and growing optimism that a deal to end the conflict involving Iran could be nearing completion.
The S&P 500 rose 0.1%, while the Nasdaq Composite also gained 0.1%. The Dow Jones Industrial Average advanced 174 points, or 0.4%.
Oil prices extend decline
Energy markets remained a key driver of sentiment, with crude prices falling for a second consecutive day.
US West Texas Intermediate crude futures dropped 4% to just above $91 per barrel, while international Brent crude futures slipped 3% to around $97 per barrel — both moving below the $100 threshold.
The decline reflects expectations that a resolution to the conflict could ease supply disruptions and reduce inflationary pressures tied to energy costs.
Iran deal hopes support markets
Investor sentiment has been buoyed by reports suggesting progress toward a potential agreement between the United States and Iran.
According to Axios, citing multiple sources, US officials believe they are nearing a one-page, 14-point memorandum of understanding that would both end the conflict and establish a framework for future nuclear negotiations.
The prospect of a deal has contributed to a broader risk-on mood, helping equities build on gains from the previous session.
Strong earnings add momentum
Corporate earnings also supported the market.
Shares of DoorDash jumped 8% after the company issued strong guidance for second-quarter orders.
Meanwhile, Fortinet surged 19% after raising its full-year billings outlook.
The positive updates follow a strong prior session, when the S&P 500 and Nasdaq reached record highs and the Dow gained more than 600 points.
Labor market remains resilient
Economic data released Thursday pointed to continued strength in the US labor market.
Initial jobless claims rose by 10,000 to 200,000 in the week ended May 2, according to the Labor Department, slightly above the previous week but below the 205,000 expected by economists surveyed by Bloomberg.
Continuing claims declined to 1.77 million, marking a two-year low and indicating that fewer individuals are remaining on unemployment benefits.
The data suggests layoffs remain limited despite announcements of job cuts from major companies such as Meta Platforms and Nike.
The labor market continues to operate in what economists describe as a “low-hire, low-fire” environment, characterised by restrained hiring and limited layoffs.
Outlook tied to geopolitics and growth
Markets are now looking ahead to the US government’s April jobs report, which is expected to show back-to-back monthly payroll gains for the first time in nearly a year.
While easing oil prices and strong earnings have provided near-term support, the outlook remains closely tied to geopolitical developments and the trajectory of inflation and growth.
A confirmed agreement between the US and Iran could further stabilise markets, while any renewed tensions may quickly reverse recent gains.
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