US Stocks Hold Record Highs Awaiting Clarity on Middle East Energy Supply
US stocks rallied on Thursday (May 7th) and maintained their sharp rally this week, supported by a solid earnings season while the market awaits clarity on energy supplies from the Middle East. The Dow Jones Industrial Average surpassed 50,000, while the S&P 500 and Nasdaq 100 held near record levels.
Macroeconomic focus remains on developments in US-Iran negotiations regarding ending the war and restoring tanker flows through the Strait of Hormuz. The prospect of resuming energy flows from the region has pressured energy commodity prices throughout the week, boosting the bond market and easing expectations of a Fed interest rate hike as the risk of energy inflation is perceived to be diminishing.
On the corporate front, McDonald's rose 2% after posting strong results, in line with DoorDash's optimistic guidance. Fortinet surged 15% following its earnings report, while banking stocks received support after Citi announced a US$30 billion share buyback plan.
The chip sector has been holding back after its previous rally, with AMD trading flat following its 19% surge last session, fueled by corporate guidance. Looking ahead, market participants are monitoring two key variables: the certainty of Hormuz-related energy supply lines, which impacts inflation and yields, and the continuation of surprises in earnings reports and company guidance, which could widen or narrow the index's rally.
Source: Newsmaker.id
